US stocks end turbulent week with broad gains
You’re not the only one confused about where the economy is headed. Just look at the stock market, where perplexed investors have been sending stocks on a wild ride in August.
And there could be plenty more where that came from. Two notoriously volatile months for stocks lie just ahead.
Stocks around the world jumped Friday to cap another tumultuous week. Investors have been frantically trying to rejigger their predictions about whether President Donald Trump’s trade war and slowing economies around the world will drag the United States into a recession. In the U.S., the result was a week where the Dow Jones Industrial Average had four days where it rose or fell by more than 300 points — with an 800-point drop thrown into the mix.
On Friday, the S&P 500 rose 1.4%. The Dow climbed 1.2% and the Nasdaq picked up 1.7%. But each index still finished with a thirdstraight weekly decline.
Stocks, bonds and other investments heaved up and down throughout the week, with worries hitting a crescendo on Wednesday when a fairly reliable warning signal of recession flipped on in the U.S. Treasury market. Friday marked the seventh time in the last 10 days that the S&P 500 swung by at least 1%, something that hasn’t happened since the end of 2018, the last time investors were getting worried about a possible recession. At that time, they were concerned about rising interest rates, along with the trade war.
Don’t expect the volatility to go away anytime soon, analysts say. No one knows when Trump’s trade war will find a resolution, nor whether all the uncertainty it’s created will push enough businesses and shoppers to hold off on spending and cause a recession. “We’re also heading into a tough season for the market,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “September and October tend to be the most volatile of the year for markets. We’ve been talking to investors for that reason to look for areas to prune risk within a portfolio.”