Statistics can simply show you how wild the markets have been. Funny enough, if we are comparing this to the last 2 years, it’s average on the wild scale, but this is one of the most volatile markets we’ve seen since the Biden presidency started. On Wednesday, the Dow Jones Industrial Average recorded its largest one-day gain since November of 2020 right after Jerome Powell’s announcement regarding interest rates. Yesterday, after the news got a night to marinate, the Dow Jones suffered its largest one-day loss this year.
Every week for the last month has been defined by this trend, where we have great upswings and downswings, but finish negative by the end. Due to uncertainty about the markets and inflation, investors see these positive days as a way to get out of investments they are no longer confident in, causing huge selling volume at the close that carries into the next day. Wednesday is a notable example, and a fitting example of current investor sentiment regarding the whole economic landscape. One major concern is what Jerome Powell said on Wednesday about ruling out large interest rate hikes as investors believe that large rate hikes might be necessary to kill inflation, which makes the last few weeks very confusing. Like normal, tech stocks are being battered the most, with e-commerce names losing a ton of value yesterday, and this all displays the struggles of being an investor in today’s market. Time will tell if this market turns into a value investor’s market as the growth side has started to sour.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.