Stock Market Stages Big Comeback After Three-Day Selloff
Market Correction of 10% or more is ‘appropriate,’ as VIX Index falls after hitting its highest since 2020 to start the week.
Tweet on the recent stock selloff
The Stock market Stages Big Comeback as VIX Index falls after hitting highest since 2020, via Bloomberg#StockMarket #Markets pic.twitter.com/MPFKbID7qj
— The_Journalbiz (@the_journalbiz) August 6, 2024
Bloomberg chart
Buyers waded into the stock market on Tuesday following a three-day rout fueled by fears of a US economic slowdown and extreme tech-sector valuations.
The S&P 500 Index rallied 2% as of 1:47 p.m. in New York, while the technology-heavy Nasdaq 100 Index gained 2.2%.
Traders appeared to be less on edge about the prospect of further turbulence, as the VIX Index tumbled after reaching the highest since 2020 on Monday.
The moves come after the S&P 500 shed 6% across the past three sessions. The turmoil was sparked by data showing a rise in US unemployment, causing investors to worry the Federal Reserve isn’t moving quickly enough to cut interest rates to stave off an economic slowdown.
The rebound in cyclicals like financials and industrials indicated investors aren’t buying into the idea that recent declines were spurred by recession fears, he said.
Hedge funds stepped in to buy the big dip in technology shares after the recent rout, according to Goldman Sachs Group Inc.’s prime brokerage data. JPMorgan Chase & Co.’s quantitative and derivatives strategists separately said they saw $14 billion of institutional net buying during market hours on Monday.
