August Brings a Flurry of Activity to US Stocks: What Lies Ahead in Terms of Volatility?
From recession talk to the yen carry trade, what will the second half of the month bring for Wall Street?
It was the best of times and it was the worst of times on the New York Stock Exchange in the first 15 days of August.
Wall Street volatility started on Aug. 1 when the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index—a measurement of the prevailing economic direction of the sector—deepened into contraction territory in July. New orders fell, prices edged up, and employment tumbled.
The Dow Jones Industrial Average shed about 600 points after the data were published. The tech-heavy Nasdaq Composite Index lost around 500 points, while the S&P 500 Index erased nearly 100 points.
The July jobs report exacerbated the selloff that unfolded in U.S. stocks.
Last month, the country added a smaller-than-expected 114,000, and the unemployment rate ticked up to 4.3 percent, the highest since October 2021.
While the monthly employment data highlighted a labor market still creating jobs, markets tanked because it activated the Sahm rule.
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