The market continued to slide this past week, despite equity indexes rebounding sharply on Friday. As of Friday’s close, the benchmark S&P 500 index and Nasdaq Composite were down 4% and 7% respectively from their late October record highs.
After a relentless rally since April driven by AI excitement and expected rate cuts, market exuberance this week gave way to caution, with investors warning of more choppiness into the holiday season as doubts grow over those two key themes. “It’s certainly approaching what looks like is going to be a volatile holiday season,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.
“Without a rate cut … and with this renewed fear out there, it seems like it’s going to be a much more difficult holiday season than we had hoped before.”
Volatility picked up dramatically this week, with the Nasdaq and S&P 500 on Thursday experiencing the biggest intraday swings since U.S. President Donald Trump’s “Liberation Day” tariff announcement in April sent markets spiraling.
Despite a modest retreat on Friday, the Cboe Volatility Index, known as Wall Street’s “fear gauge,” remains above the key 20-level, suggesting persistent investor anxiety.