On a wild day on Wall Street, stocks ended the day higher with a stunning turnaround just before the closing bell. Stocks began the day with a dramatic selloff.
US stocks opened in the red as investors worried about the Federal Reserve’s plans to hike interest rates, tensions in Ukraine, earnings season and — of course — inflation.
At the low point of the session, the market was on track for its worst day since October 2020, with the Dow down more than 1,000 points.
But with just minutes to go in the trading session, the major indexes reversed course and turned green. The Dow finished 0.3%, or 99 points, higher.
What on earth happened to turn things around? The selloff may have just gone a bit too far.
“Investors may have gotten a bit too pessimistic about the growth outlook,” said Oanda senior market analyst Edward Moya in the late afternoon.
The S&P 500 (), the broadest measure of the US equities market, also ended up 0.3%. During the session, the index had been on track to fall into correction. But it wasn’t meant to be, at least not on Monday: Last week, it logged its worst week since March 2020.
The Nasdaq Composite (entered correction territory last week, closed up 0.6%.), which
The wild swings of the day were also visible in the CBOE Volatility Index (), or Vix, which soared during the day but ended the session “only” 3.2% higher.
CNN’s Fear & Greed Index still flashed fear Monday afternoon, but the level was slightly less severe than on Friday.
Each day last week, stocks fared worse in the final hour of trading, which tends to be a bad sign for the next day, said TD Ameritrade chief market strategist JJ Kinahan.
“After a tough start for stocks in 2022, investors are looking for reasons to expect a rebound,” said Jeff Buchbinder, equity strategist for LPL Financial, in emailed comments.
“After more than doubling off the pandemic lows in March 2020, without anything more than a 5% pullback in 2021, stocks probably needed a break,” he added. “That doesn’t, however, make this dip feel much more comfortable.”