By Matt Egan
NEW YORK — After days of extreme turbulence, Wall Street has calmed down a bit.
The Dow fell about 100 points at the opening bell Wednesday before bouncing back for a 100-point gain. It’s a significant improvement following three straight days of sharp declines at the open. The S&P 500 and Nasdaq alternated between gains and losses.
On Tuesday, Wall Street staged a dramatic turnaround. After sinking 567 points early in the day and stumbling into correction territory, the Dow ended the day with a mirror-image gain of 567 points.
The powerful bounce has given hope to the bulls that the market has begun to find a bottom after extreme selling in recent days.
Overseas market jitters mostly eased after plunging earlier this week. Asian stocks closed mixed overnight, and European indexes were mostly higher.
“Global markets are breathing a huge sigh of relief after a late rally in U.S. stocks yesterday,” currency analysts at ING wrote in a report on Wednesday.
The question now is whether “this draws a line under the recent stock market correction or whether this is merely a dead cat bounce,” analysts wrote.
Despite the market slump, analysts believe the fundamental backdrop looks solid. Corporate earnings have never been higher and U.S. and global economic growth has gained steam.
Investors will keep a close eye on the bond market. Heavy selling in the U.S. Treasury market caused the 10-year yield to spike to 2.85% last week, worrying Wall Street about inflation and faster rate hikes from the Federal Reserve. Higher bond yields also make stocks look less attractive by comparison.
The 10-year Treasury yield has receded in recent days and is trading around 2.77% on Wednesday.
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