With under half an hour to the closing bell in New York, things were looking pretty ugly, with the S&P 500 index down 1.82%, slipping under the psychologically-important 1800 mark, and the Dow Jones dropping below 16,000 with a fall of 1.58%.
This is a sentiment-driven fall, and while a ‘buy-the-dips’ mentality presided over the US stock market throughout last year, there have been precious few signs of such price action in the past couple of days.
With many companies reporting earnings growth as prices become rapidly cheaper, eventually we will see value buying, but at the moment the market looks plain spooked.
It’s an interesting state of affairs with another FOMC meeting just next week. Fears about the Fed’s tapering schedule is tied up in the story, of course, so it will be interesting to see if the central bank’s committee feels duty bound to reassure the market by deferring a further taper.