Volatility has returned to U.S. stocks after a sharply higher open on Friday, extending a roller-coaster week that saw the Dow Jones Industrial Average notching record-setting point swings.
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Friday marked the sixth day in a row that the Dow has swung more than 500 points from the day’s high to its low. The only time when there were more consecutive days of such large point swings was on Oct. 17, 2008, during the financial crisis when there were seven such days in a row.
While the major U.S. stock indexes oscillated between gains and losses before the opening bell, shortly before trading was scheduled to open they moved into positive territory and continued that momentum through the open. But, as the session has continued they once again returned to their volatile ways, and swung between gains and losses.
Before market open the index had dropped roughly 2,700 points since last Friday. Positive economic factors such as low unemployment and rising wages have investors thinking that the Federal Reserve will keep raising interest rates.
Asian markets followed the U.S. session with more losses. In Europe, London’s FTSE dropped to a 10-month low, and Germany’s DAX joined the Dow and S&P in correction territory.
“The question for many is how much further the U.S. can fall and to what extent global markets can de-couple from the fallout,” said Michael Ingram, chief market strategist at wealth manager WHIreland. “The answer to both may be as much about market psychology as it is about market fundamentals, though I’m heartened to see at least partial protection from the U.S. epicenter.”
