As the Wall Street has been moving in an unsteady way, without giving any proper indication of its direction and the market gets sickened over the contraindicatory comments of White House regarding the trade war, it appears that this current leg of stock volatility might become pervasive.
Hammering the Wall to open up the cracks further, the FED interest rate saga had also been playing pivotal role in recent trend of enormous level of volatility. This week, the S&P500 shredded off 4.6%, which completely wiped away all of its past-week’s gain, resulted from the dovish comment of FED Chair, Jerome Powel, as he was pointing that the US economy was closer to its target inflation rate and there had been a very little chance to hold on to its current course of rate hike, echoing the US president Donald Trump, who had been criticizing the rate hike for past couple of months.
S&P 500 gained 4.8%, followed by the dovish rate talk. However, this week has experienced further nervousness regarding the possibility of a comprehensible trade deal between US and China and the US yield curve was showing economic weakness, that might provoke the FED to continue their hawkish momentum.
As a consequence, S&P 500 and other indexes of Wall Street suffered a terrible swing, which has now been considered as its biggest swing since 2011. As, there had been a very little shimmering signs of improvement, the side-way swing may persist, until US and China could reach a decipherable trade deal.