- US stocks rebounded in late-afternoon trading to end a volatile week.
- On Thursday, the Dow Jones industrial average and the S&P 500 tumbled into a correction, defined as a 10% drop from their most recent highs.
- Track the Dow at Markets Insider.
US stocks surged in late trading on Friday to end their worst week in two years.
Here’s the scoreboard for Friday:
- Dow: 24,192.76, +332.30, (1.39%)
- S&P 500: 2,619.57, +38.57, (1.49%)
- Nasdaq: 6,874.49, +97.33, (1.44%)
Illustrating the speed of this week’s drop, Ryan Detrick, a senior market strategist at LPL Financial, noted it was the first time the S&P 500 corrected 10% from an all-time high within nine days.
The worst of the sell-off began with last Friday’s jobs report, when data on wages showed that inflation may be picking up and could prompt the Federal Reserve to combat it with higher interest rates.
The Dow fell by as much as 1,500 points on Monday, its largest such decline that erased its year-to-date gains.
Selling was amplified by so-called target volatility funds that rushed to sell stocks and buy protection against higher volatility. Before this week, the Cboe Volatility Index, or VIX, waded near historic lows. The gauge of traders’ expectations for future volatility spiked on Monday by the most ever in a single day as stocks fell.
“Over the coming months we should expect to see more turbulence as evidence of higher inflation becomes clearer,” Torsten Slok, the chief international economist at Deutsche Bank, said in a note.
Investors will get more clarity on inflation next week Wednesday, when the January Consumer-Price Index is released. The 10-year yield climbed to as high as 2.88% this week amid speculation of higher inflation.
Read more coverage of this week’s market meltdown: