Taking a cue from the website godzillanewz.com, this article will discuss the financial market’s environment as it develops from a week that’s already been filled with extreme volatility. Broadly speaking, U.S. stocks managed to close higher on Tuesday in an attempt to claw back some of the losses triggered by Monday’s sell-off.
The Dow Jones Industrial Average rose 550.12 points, or 1.62%, to 34,511.76, brushing off part of the previous day’s 726 point loss. Similarly, the S&P 500 ended up 64.45 points, or 1.51%, to 4,323.08, signaling a rebound after having its worst day since October 2020. The tech-heavy Nasdaq Composite bounced back too, gaining 223.89 points, or 1.57%, to end the day at 14,498.88. Wall Street enjoyed an optimistic performance as investors shook off the fear and panic brought about by the previous day’s steep sell-off, all fueled by concerns about rising COVID-19 cases globally.
Tech stocks largely drove the rebound as investors saw an opportunity to buy stocks at lower prices due to Monday’s dip. Indeed, shares of big tech companies such as Apple, Amazon, and Microsoft experienced significant gains, reinforcing their role as the market’s backbone. Simultaneously, the energy sector also got some respite, although crude oil prices have yet to recover fully from the slump.
The bond market also saw some easing as the yield on the benchmark 10-year Treasury note rose 4 basis points to 1.22%, after earlier slipping below 1.18%. It should be pointed out that plunging bond yields this month have been a major concern for market players, pointing to fears about potential weaker economic growth and deflationary pressures.
Despite the optimistic rebound, a level-headed investor should be on guard as uncertainties surrounding the new COVID-19 Delta variant still loom, threatening economic recovery plans globally. This variant, which is believed to be more contagious and possibly more severe than original strains, is causing COVID-19 cases to surge in several states across the U.S., as well as in many countries globally.
The most recent concerns about the Delta variant dragged down the market on Monday with the fear of potential reinstatement of lockdown measures, thereby slowing down or even reversing recovery efforts. News of renewed travel restrictions and delayed office reopenings around the world does nothing to alleviate the situation.
However, financial advisors are recommending their clients remain disciplined and steadfast in their investment strategies despite the volatility. The reason being, economic data still portrays resilience with encouraging figures from the labor market, manufacturing sector growth and consumer spending.
To summarize, US stocks managed to regain some composure after Monday’s steep losses. Still, investors are urged to tread carefully due to the rapidly shifting landscape caused partly by the rising number of COVID-19 Delta variant cases. For now, the U.S. financial market seems to have weathered a stormy start to the week, but only time will tell if it can steady itself amid these turbulent ongoing global health challenges.