Current Market Volatility Sees S&P 500 Drop 2.9% in Worst Week Since March

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This marked the worst performance since March. Despite this, the index has shown a 12.5% increase year-to-date.

Current Market Volatility
Current Market Volatility ( Photo: Charles Schwab )

The current market volatility witnessed a significant downturn last week, resulting in a 2.9% drop in the S&P 500, closing at 4,320.06

It’s up by 20.8% from its low of 3,577.03 on October 12, but down by 9.9% from its record high of 4,796.56 on January 3, 2022. The recent weeks have proven challenging for the stock market, especially after reaching its 2023 peak of 4,588.96 on July 31. As market analysts emphasize, it’s not unusual for stocks to undergo significant fluctuations within a year in the current market volatility. Such fluctuations are inherent when dealing with risky assets like stocks.

Market experts stress the importance of considering one’s timeframe, whether engaging in short-term trading or pursuing long-term investments. Regardless of approach, success in the stock market hinges on recognizing that it’s a gradual process, where time plays a pivotal role in the current market volatility.

Analyzing historical data, it’s revealed that the odds of the S&P 500 being in the green over a one-month period stands at 62.6%. This figure notably climbs to 74.6% for a year and soars to 97% over an eight-year span. The data underscores the adage that “time in the market beats timing the market.”

The Federal Reserve chose to maintain rates, holding the federal funds rate steady at 5.25% to 5.5%

The Fed‘s statement highlighted robust economic activity, although job gains have slowed and inflation remains elevated. Notably, the Fed revised GDP growth estimates upward for 2023 and 2024, with a corresponding increase in the projected Fed funds rate for 2024.

This current market volatility development, while posing challenges, coincides with strong consumer and business financial positions, providing a buffer against potential headwinds.

 

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