US stocks are getting creamed as a volatile week rages on

  • The stock market is weaker again on Thursday on Wall St as a volatile week of selling continues.
  • Stocks have failed to hold a strong rebound since Friday, when a better-than-expected report on wages added to worries about higher US inflation.
  • Track the Dow Jones industrial average at Markets Insider.

Stocks are rolling over again.

At 3:37 p.m. ET, the Dow Jones industrial average was down 741 points (-3%), the S&P 500 was down 70 points (-2.36%), and the Nasdaq was down 197 points (-3%).

Stocks have failed to hold a strong rebound since Friday, when a better-than-expected report on wages added to worries about higher US inflation. The selling has continued this week, worsened by technical factors including the implosion of trading strategies that had bet on low volatility.

Stocks rallied strongly on Wednesday, with the Dow closing up 567 points, or 2.3%. By Thursday, the index of large companies including Boeing and Apple returned to the red for 2018. It’s lost about 6% over the past week.

The sharp moves this week have raised questions about how quickly investors would be willing to buy stocks at cheaper prices, or stay cautious amid the threat of higher inflation. After a long period of low borrowing costs that benefitted companies, the Federal Reserve may be moved to raise interest rates faster than investors expect.

“There’s no rush to come in here and buy this market because it’s not just a technical selloff,” said Larry Hatheway, the chief economist at GAM Investments. “There are several fundamental stories that lie behind it, and that’s preventing people who might see value from jumping in at better prices to exploit it,” he told Business Insider.

Several other strategists, however, have said this is an opportunity to ‘buy the dip.’

The Cboe’s Volatility Index was weaker on Thursday, near 27.41. However, its still more than twice as high as its recent, unprecedented lows, having suffered its biggest one-day spike ever on Monday.

This so-called fear gauge tracks traders’ expectations for future instability and moves in the opposite direction to the S&P 500 most of the time.

“Expect more volatility from here,” said Jeremy Hale, the head of asset allocation and global macro at Citi, in a note on Thursday. Rather than try to catch a falling knife, we would rather wait for signs of stabilisation.”

Read more coverage of the market meltdown:

CITI: There’s a ‘clear winner’ for investors who want to cash in
on the market’s biggest fear

The chief strategist at a $695 billion money manager tells us why ‘we’re at a watershed point in markets’

One of the biggest narratives behind why the stock market just went haywire is wrong

The infamous ‘VIX Elephant’ trader just returned to harvest the gains he made when stocks went haywire

Fed President Kashkari gives us his take on the stock market’s plunge and the economic data that triggered it

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.