NEW YORK, NY – Stocks experienced their worst day of the year on Tuesday as concerns over a hotter-than-expected inflation report rattled investors. Despite the Dow Jones dropping more than 500 points and the S&P 500 falling about 1.4%, Wall Street strategists pointed out signs of resilience in the market.
The S&P 500 managed to avoid a 2% daily drawdown, a feat it had not achieved since February 2023. This was seen as a positive sign by many, including CMT chief global strategist Jay Woods, who noted that the Russell 2000 found support around its 50-day moving average, a crucial technical factor.
Contrary to expectations, the market rebounded less than 12 hours after a souring sentiment on Federal Reserve interest rate cuts. The Nasdaq Composite was up almost 1%, leading Fundstrat head of research Tom Lee to declare that it was “too early” to call a market top for the first quarter of 2024.
The general sentiment is that the market remains resilient, with many analysts cautiously optimistic about the future. Despite the significant drop, the signs of recovery and the resilience displayed by certain key indices have left many strategists reassured about the overall stability of the market.
Looking ahead, there is a considerable amount of uncertainty regarding how the market will perform in the coming weeks. However, the current consensus among Wall Street strategists seems to be one of cautious optimism, with many believing that the recent turbulence may present buying opportunities for savvy investors.