When trading opened Tuesday, the wild ride continued as the Dow Jones opened down more than 500 points before rebounding and erasing its early losses. But you find some better news underneath that unpleasant fact when you look at what has happened in the bond market while stocks have been falling.
Selling accelerated shortly after 3 p.m.in NY, with the Dow sinking more than 800 points in a matter of 15 minutes only to snap back. The Dow is still up 20 per cent over that time, the S&P 500 15 per cent.
Kljunich said it is important to be familiar with any investments. That's making bonds more appealing to investors compared with stocks.
"Sometimes the market does get disconnected from economic reality to the upside and it needs to get in line", said Jack Ablin, chief investment officer at Harris Bank.
'We're always concerned when the market loses any value, but we're also confident in the economy's fundamentals, ' an official stated yesterday. The Dow notched its biggest intraday decline in history with a almost 1,600-point fall.
The S&P 500 index recorded its biggest daily drop in over six years on Monday, and the VIX index shot up to its highest level since August 2015, breaking out of a historically low range.
Small business confidence is at an all-time high.
Still, the Dow's precipitous drop created a climate of uncertainty in global markets.
It is also important to note that some people who don't directly own stocks are still affected by the market's performance. For example, today's point drop more than doubled the Black Monday crash in 1987 (1,175 versus 508), yet the percentage decline was only about a fifth as great (-4.6% versus -22.61%).
However, Wall Street is starting to get anxious that the "goldilocks" environment of slow growth and mysteriously low inflation may be ending.
Wall Street indexes repeatedly swung from positive to negative territory during the session.
Elsewhere in the region, Japan's Nikkei 225 index closed down 4.7%, while Hong Kong's Hang Seng dropped 4.5% and South Korea's Kospi index gave up 2.6%.
After months of unusual calm, fear has raced back onto Wall Street.
"Yes, investors should be mentally prepared for more downside", said Mitchell Goldberg, president of ClientFirst Strategy, although he added that he didn't expect the major indices to fall more than another 1 to 3 percent in the near term. "We can't rule out a 1987-like event, which amounted to a one-day bear market".
Data on Friday showed the year-on-year increase in average hourly earnings rose to 2.9 per cent, the largest rise since June 2009. But it receded significantly on Tuesday, to 2.79%.
The original trigger for the equities sell-off was a sharp rise in U.S. bond yields late last week after data showed United States wages increasing at the fastest pace since 2009. Additionally, both global and US gross domestic products are expected to keep rising, which would further prompt the Fed to raise rates. Trump has frequently touted the rise of the stock market during his presidency. But that's down significantly from the 8,000-point gain it was showing a few weeks ago.
"The only data point of the day showed the USA non-manufacturing sector started 2018 in robust health", he said. "It wouldn't be a surprise... particularly when the market has grown as strong as it has for as long as it has".
If you're like a lot of investors, sitting on the sidelines and watching the recent market drop was probably a little scary.