- Strategists say there’s more trouble ahead for the stock market which is experiencing its worst December since 1931.
- Stocks plunged on fears of a recession, and the Nasdaq was temporarily in bear market territory, a 20 percent decline from its recent highs.
- The Cboe Volatility Index temporarily jumped above 30, its highest since the major market sell-off in February of this year.
- Strategists blame recession worries brought on by a tone-deaf Fed and continuing fears that trade wars and slowing global growth could sink the U.S. economy and chisel away at corporate profits.
Stocks plummeted toward bear country, led by the Nasdaq Composite Index, and Wall Street’s preferred fear gauge rocketed higher Thursday.
And strategists say the selling will get worse before it gets better.
After the Federal Reserve spooked markets Wednesday, risk assets and stocks have been reeling, with some of the sharpest losses on Thursday in growth sectors like biotech and technology. That weighed hard on the Nasdaq, which closed down 1.6 percent after falling temporarily into a bear market, down more than 20 percent from its recent high during most of the day. The Dow fell 454 to 22,859, closing below he psychological 23,000 level, and the S&P 500 was off 1.6 percent at 2,467, or 16 percent from its highs.
The CBOE Volatility Index jumped above 30, its highest since the major market sell-off in February of this year. It was at 28.53 in late trading.
“The market’s in no man’s land,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. Stocks have broken through the lows of the year, and technicians are scurrying to find the next support levels. On the S&P 500, he said 2,400 is a potential psychological area of support.