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Ammon News - The S&P 500 nearly dug out of the deep hole where it began the week, as cooler heads prevailed.

The S&P 500 rose 0.5% on Friday, hovering just about two points below where it finished last week. The Dow Jones Industrial Average was up 51 points, or 0.1%. The Nasdaq Composite was up 0.5%. The Dow and Nasdaq also posted modest weekly declines.

The Nasdaq 100 rose nearly 0.4% this week after trading down as much as 5.5% at its low earlier in the week. That's its biggest comeback from a weekly low since Feb. 25, 2022, according to Dow Jones Market Data.

It was a rough week. On Monday, the S&P 500 fell 3%, its worst daily decline since 2022. Fears about softening economic data and whether the Federal Reserve is behind the curve on interest rate cuts sent volatility spiking and stocks sinking.

The Japanese yen also surged that day, which had implications for traders who borrowed at low rates in the currency to invest in higher-yielding assets.

The CBOE Volatility Index, which flew to 65.73 during Monday’s selloff, was back down around 20 today.

Market participants aren’t necessarily done worrying about the economy, but the consensus seems to be Monday’s steep selloff was overblown. Whether the market is due for another drop or a rally higher depends on the data ahead.

The next big event will likely be Wednesday, when the Labor Department report the consumer price index for July.

Barron's