But with just minutes to go in the trading session, the major indexes reversed course and turned green. The Dow finished 0.3%, or 99 points, higher.
What on earth happened to turn things around? The selloff may have just gone a bit too far.
“Investors may have gotten a bit too pessimistic about the growth outlook,” said Oanda senior market analyst Edward Moya in the late afternoon.
Each day last week, stocks fared worse in the final hour of trading, which tends to be a bad sign for the next day, said TD Ameritrade chief market strategist JJ Kinahan.
“After a tough start for stocks in 2022, investors are looking for reasons to expect a rebound,” said Jeff Buchbinder, equity strategist for LPL Financial, in emailed comments.
“After more than doubling off the pandemic lows in March 2020, without anything more than a 5% pullback in 2021, stocks probably needed a break,” he added. “That doesn’t, however, make this dip feel much more comfortable.”
A lot to digest
Investors also have a lot on their plate this week.
Expectations are only part of the game. The Fed could also conclude that inflation has run too hot at the end of 2021 and crank up rates more — or sooner.
Treasury yields, which track interest rate expectations, were off last week’s highs Monday but inched higher in the late afternoon. The 10-year bond yielded 1.76% around the time of the close after climbing past 1.8% for the first time since before the pandemic last week.
Commodities markets are feeling the pressure of the rising tensions and analysts believe oil prices could soar if the situation escalated. On Monday afternoon, however, US oil prices settled down 2.1% at $83.31 per barrel.
— CNN Business’ Julia Horowitz contributed to this report.
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