Where Is the S&P 500 Headed After Its Worst August in Years?
The stock market had a strong performance earlier this year, with the S&P 500 rising by 21% in seven months as investors increased their equity holdings. However, over the last three weeks, the benchmark index has fallen approximately 5%.
Market observers with keener insights may not be surprised by this month's poor performance. Data compiled by Stock Trader's Almanac shows that August has been the second-worst month of the year for US stocks for over 30 years. This trend is exacerbated in the year preceding a presidential election.
At the same time, bond yields are spiking as investors push out their expectations for rate cuts by the Federal Reserve. Rising rates can be detrimental to stocks, especially high-growth tech stocks, as they increase borrowing costs and negatively impact profitability. Additionally, Fitch's downgrade of US debt and the unclear outlook on inflation have contributed to the market's current lackluster state.
Here's where Wall Street firms see the stock market headed next.
Source: Insider, Bloomberg
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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VineetKumarGupta : If August is second worst month for returns, May I know the worst month ?
UncertainInvader : On pre-election years, there is, historically, on average, a little rise into late August/early September, ending with a mid-September bottom and poor October, followed by a holiday rally into end of year. This year, seasonal expectations have largely played out, but can still change. September is usually the worst month.
70553839 : The market is always up and down most times.
73467169 : It's a frail market