The S&P 500 Stages Its Biggest Turnaround Since February

(Bloomberg) -- The brutal reversals that have whipsawed equity investors are happening at a faster pace. 

The S&P 500 just erased a 1.3% decline Wednesday, the first time since February that stocks mounted a full recovery from such a big loss. Stocks bounced back as Republicans were poised to offer Democrats a way to end the debt limit impasse.  

The intraday turnaround followed a stretch of wild swings that left the benchmark alternating between gains and losses of at least 1% for four straight sessions, the longest such run since June 2020. 

While the rebound is welcome news for equity bulls, it reflects a challenging environment for traders. Faced with a cacophony of macro-economic uncertainties -- from the Federal Reserve’s pledge to cut monetary stimulus to China’s real estate woes and energy crisis -- investors appear to have a hard time making up their minds about the market’s directions. 

And with headlines around policy shifts multiplying, financial assets are on a wild ride. Natural gas prices -- up as much as 40% at one point -- turned lower after Russia’s President Vladimir Putin said the country is ready to help.

“Wall Street has become a rollercoaster ride,” Edward Moya, senior market analyst at Oanda Corp., wrote in a note. “Investors try to navigate through inflationary pressures, debt ceiling drama that everyone knows will eventually be resolved, and as global central banks start to deliver fastening tightening cycles.” 

The S&P 500 ended Wednesday up 0.4% for its third gain in four sessions. The Nasdaq 100 also closed higher after falling as much as 1.2%, making a reversal on a scale not seen since August.

©2021 Bloomberg L.P.