The Dow dropped 464 points, or 2%, on Thursday.
The Dow Jones Industrial Average rose 360 points, or 1.6 percent, to 23,214. The Nasdaq Composite was down 1.05% and flirting with bear-market territory, meaning it was down nearly 20% from its recent peak, for the first time since the financial crisis.
Dragged down by its extra-heavy weighting in technology giants like Apple and Amazon.com, the benchmark fell for the fifth time in six days, briefly sliding 20% below its intraday record from August. Brent crude, the standard for global oil prices, fell 1 percent to $53.82 a barrel in London. As suggested in earlier posts, lower interest rates compared to the previous scenario should boost stock markets and push the currency lower.
"If you live by momentum, you die by momentum", said Sam Stovall, chief investment strategist for CFRA.
Trump is in the midst of shaking up his administration: Since November, he's announced the departures of Attorney General Jeff Sessions; Chief of Staff John Kelly; Interior Secretary Ryan Zinke; and, most recently, Defense Secretary James Mattis. Although a short-term shutdown would not have a large impact on the national economy, it would serve as a reminder of government dysfunction. "The market is acting like we're moving to a phase of a synchronized global bear market", he said. It is now down 17.5 percent from its closing high on September 20. It's premature to say the Nasdaq is officially in a bear market: Market analysts tend to calculate bull and bear markets using closing numbers.
But the slight revision was not enough to ease market fears over a further USA economic slowdown on the back of trade tensions, a waning boost from tax cuts and tightening monetary conditions for companies.
"Trade has been making headlines, but I think a gradual tightening of monetary policy has been the driving force behind recent market volatility".
The linkage between liquidity largess and equity market returns has been particularly acute during the most recent bull market, as corporate treasurers used easy money to buy back their shares.
Benchmark U.S. crude dipped 0.2 percent to $45.77 a barrel in NY.
U.S. envoy quits over Trump Syria pullout
McGurk, who was a holdover from the Obama administration, will now leave his job at the end of this month. Brett McGurk cited gains in accelerating the campaign against Daesh, but that the work was not yet done.
But with financial markets in turmoil and fears of recession growing, some critics are questioning the plan.
It also upset markets, sending the Dow Jones 350 points, or 1.5%, lower on Wednesday, and by almost 500 points, or 2%, on Thursday.
"Everyone is hoping that their (Fed's) press conference and their statement is dovish, which means that we will see fewer rate hikes next year than we did this year".
By trimming the number of rate hikes they foresee in 2019, to two from three, policy makers signaled they may soon pause their monetary tightening campaign.
"The Fed behaving in a very prudent, balanced way increases the possibility of a very balanced expansion" continuing, he said. The US action underscores the fragile nature of the trade ceasefire between Washington and Beijing.
Previous hikes and a stronger dollar will gradually bite into the economy just as fiscal stimulus fades and foreign economies from China to Europe also cool.
So why is Trump calling the US Federal Reserve "crazy"? The S&P 500 is now trading at just 16 times its trailing earnings, the lowest price-to-earnings ratio in several years, according to Bespoke. Weakness in that earlier period was dominated by commodity-related markets and exacerbated by quantitative tightening in China, and although the US equity market suffered periods of liquidation, it was arguably never at the heart of global concerns.