All 30 Dow stocks were down and only 20 of the blue chip S&P 500 stocks were trading higher on Monday.
Shares also fell on Friday as the market ended a four-week winning streak. Markets rebounded in July and August after a brutal first half of 2022. But the pendulum could swing back to pessimism.
This has led more market watchers to predict that the Fed may remain aggressive with rate hikes for the foreseeable future. The probability of another 75 basis point hike from a half point hike is now considered to be around 50-50.
“Market expectations for what the Fed will do have a history of reversal based on economic data,” Lindsey Bell, chief money and markets strategist for Ally Invest, said in a statement Monday. “As long as the Fed is in charge, volatility will likely remain high and the market will remain reactionary.”
“It’s more like a bullish rally in a bear market,” Oktay Kavrak, director of product strategy at Leverage Shares, said of what’s been going on with stocks over the past few weeks. “Recession is still a base case and inflation remains stubbornly high. This could be one of those years when the market remains choppy.”