The S&P 500 rose Thursday afternoon after the broad index flirted with a third straight day of losses.
The S&P 500 recovered from a nearly 1% drop earlier in the session and was recently trading up 0.4%. Stocks closely tied to an economic recovery led the rebound while some ongoing weakness among high-growth stocks and shares of energy companies held back the S&P 500 and other major indexes from moving meaningfully higher.
Thursday’s give and take is the latest episode in a volatile stretch of trading over the last month. Signs of a resurgent economy, rising interest rates and nascent inflation have spurred a massive rotation into value stocks. These stocks benefit from an economic rebound, such as shares of manufacturers, banks and retailers. Meanwhile, investors have been pulling money out of tech companies, viewing those high-priced stocks as particularly vulnerable to the shifting economic winds.
Thursday’s sliver of gains wasn’t a sign that the volatility was nearing an end, analysts said. Instead, several say investors should be bracing for more topsy-turvy sessions.
“From here, you could have in aggregate flattening markets. We’re going to be looking for a new narrative,” Daniel Morris, chief market strategist at BNP Paribas Asset Management. “Growth could recover, value could wait, and then on the surface nothing happens. I have modest expectations for the market until we get a sense of what the next catalyst is.”