S&P 500 and Nasdaq hit record highs as volatility grips Wall Street
It was a volatile day on Wall Street, where stocks suddenly tumbled mid-morning before bouncing back. Investors have a lot on their minds: President Joe Biden’s stimulus plan is facing criticism from lawmakers concerned about the deficit, a deluge of corporate earnings is on tap and drug maker Merck pulled its Covid-19 vaccine plans.
Meanwhile, various trading platforms appeared to struggle with outages: Vanguard and Charles Schwab acknowledged on Twitter that some users are experiencing problems, while Downdetector also flagged issues for users of Robinhood, TD Ameritrade and E-Trade.
And yet the S&P 500 and the Nasdaq Composite ended the day at all-time highs, up 0.4% and 0.7%, respectively.
The Dow was the odd one out, closing down 0.1%, or 37 points, after falling more than 430 points at its low point.
“This risk off [dynamic] isn’t worrying me. It’s healthy,” Megan Horneman at Verdence Capital Advisors told CNN Business about the morning’s selloff. “I expect to see more days like this in [Biden’s] first 100 days,” as campaign promises get a reality check, she added.
The US vaccine rollout will likely continue to be bumpy as well, with potential for negative headlines, Tom Martin, vice president and senior portfolio manager at Globalt.
JJ Kinahan, chief market strategist at TD Ameritrade, noted “there’s a lot of news to digest for investors. We’ve had such an incredible run, and 20% of the S&P 500 are releasing earnings this week.”
Big names including Apple, Facebook, Microsoft and Tesla are reporting earnings this week. So investors might be taking some money off the table ahead of the fourth-quarter results, which could explain some of the weakness in the market.
“I do think we’ve been in a euphoric state in the market for awhile, and now that the election settled and congress is in place, a lot of the good news has already been priced in,” Martin told CNN Business.
Volatility has also gripped certain single stocks: trading in gaming retailer GameStop was halted multiple times throughout the session as the company’s shares soared thanks to bullish investors touting the stock on Reddit.
