Twitchy Traders Have S&P 500 Comebacks Fizzling at Historic Pace
The S&P 500 has yet to see two consecutive up days in August, signaling a lack of investor conviction and potentially foreshadowing further declines in the stock market rally.
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Posted 8/27/2023, 1:00:00 PM
yahoo.com
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After a strong surge in June and July, the S&P 500 index has experienced a significant decline in August, with tech stocks being hit particularly hard, as fears of rising interest rates and a slowdown in China weigh on the market.
The S&P 500 Index reached a high in July but has since experienced a pullback of -4.8% in the first three weeks of August, with further downside possible, although the market may be near a turning point.
The S&P 500 is showing signs of a new bull market, but some experts are cautious and want to wait until the index reaches its previous high, meanwhile, there are two stocks, Sea Limited and Upstart Holdings, that have the potential to more than double in value over the next 12 to 18 months based on analysts' price targets.
Last week in the stock market resembled a game of punchball, with alternating positive and negative days, but overall the S&P 500 showed a descent of less than 4% over four weeks.
Summary: Despite a dismal August for the stock market, the S&P 500 narrowly avoided a particular negative outcome, setting up for the next test.
The S&P500 rose on Wednesday, supported by signs of weakness in the labor market and slower economic growth, reinforcing expectations of a Federal Reserve pause next month.
Job growth in the US slowed in August, signaling the impact of high interest rates, which has given traders hope that the Federal Reserve might pause hikes; US stocks rallied on the news, with the S&P 500 on a four-day winning streak and regaining some of August's losses.
The S&P 500 has had a strong performance this year, but reaching a new record high seems unlikely at this point.
The S&P 500 is unlikely to experience a similar rally to the one seen 11 months ago despite the increase in U.S. consumer price inflation, according to chief market technician Jonathan Krinsky.
Wall Street finished the week with a decline in stocks, as the S&P 500 posted its second consecutive losing week, with technology and retail sectors contributing to the slide, while investors await the upcoming Federal Reserve interest rate policy meeting.
The S&P 500 has fallen to the bottom of its bullish trading channel and entered its weakest 10-day period of the year, while certain sectors like energy and financials show strength, as investors await the outcome of the Federal Reserve's policy meeting.