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Wall Street’s Volatility Index, or VIX, extended gains on Thursday morning, rising 5.4% to 32.89 points after Friday’s economic report showed strong jobs numbers and lofty growth salaries.

Analysts say the report gives the Federal Reserve the green light to raise interest rates by 0.50 percentage points to rein in four-decade highs in inflation, in part due to a weak market. tense work and rising wages. This could still lead to market jolts, dragging high-flying tech stocks even further.

The stock market tumbled wildly on Thursday, with the Dow Jones Industrial Average posting its biggest drop this year just a day after its biggest gain since 2020, contributing to a murky outlook for investors. Analysts note, however, that despite the volatility in equity markets in recent days, the VIX is still 9.8% below its March 2022 highs.

“This suggests that investors believe an even deeper selloff could occur over the next few months, with the Fed expected to raise interest rates another 50 basis points at the June meeting,” Robert Schein said. , chief investment officer at Blanke Schein Wealth Management, in a note. “If investors truly believed the bottom was near, we would likely see an even higher VIX.”

Schein advises investors to be prepared for sideways trades in the near future, especially as the market remains divided on whether the bottom is there.

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