You probably saw the news: On October 27, the S&P 500 officially slid into a market correction. A correction is when the markets decline 10% or more from a recent peak. In the S&P’s case, the “recent peak” was on July 31, when the index was at 4,588.1 On Friday, the index closed at 4,117 – a drop of 10.2%.1
If you’ve been paying attention to the headlines, you know that September was a rough month for the markets. What’s behind this surge in volatility? While it’s easy to see all these numbers and headlines and feel overwhelmed, it might be helpful to think of the markets as a knotted-up ball of string. By slowly tracing the string backward, we can gradually untangle it.
Economists have been predicting a recession for the U.S. economy ever since the Federal Reserve began aggressively raising interest rates in 2022. This is Econ 101.
Before we get started, do us a favor. Pick up your phone or go to your computer. Open your internet browser and search for “S&P 500.” The first result will show the current price of the index. Make a note of the number.
Looking back on the quarter that was and ahead to the quarter that is to be better-informed investors!
Everyone knows the Fourth of July is a chance to go on that much-needed summer vacation. It’s an opportunity to get together with family and enjoy backyard barbecue. It’s a time for parades and picnics, fireworks, and fun. It’s a way to feel and express pride in our country.