U.S. equity markets whipsawed between gains and losses on Oct. 14 in an extremely volatile trading session.
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The blue-chip Dow Jones Industrial Average erased a 615-point decline at the start of the day to rise more than 400 points in afternoon trading before finishing up 202 points, or 0.44%. Similarly, the benchmark S&P 500 staged a big comeback only to sputter out and end the trading day down 10 points or 0.16%. The technology-heavy Nasdaq Composite index closed down 172 points or 0.76%.
The volatility comes as investors try to make sense of the ongoing U.S.-China trade dispute, with President Donald Trump imposing 100% tariffs on Chinese imports effective Nov. 1. That move came after China curbed its shipments to America of critical earth minerals, magnets and metals that are found in advanced technologies such as electric vehicles and smartphones.
Strong Earnings
The selloff on Oct. 14 occurred despite a strong showing among U.S. banks to kick off third quarter earnings season. Major financial players such as JPMorgan Chase (JPM), Goldman Sachs (GS), and Citigroup (C) each reported better-than-expected Q3 financial results. Wells Fargo’s (WFC) results were so good they sent its share price up 7% on the day.
However, the strong bank prints weren’t enough to shake off worries about U.S.-China trade relations after officials in Beijing moved to tighten their grip on global shipping, adding fuel to an already volatile trade situation. Several high-flying technology stocks were hard hit on the day, with Nvidia’s (NVDA) stock falling 4% and Amazon’s (AMZN) share price declining 2%.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 ETF Trust (SPY) currently has a Moderate Buy rating among 504 Wall Street analysts. That rating is based on 420 Buy, 78 Hold, and six Sell recommendations issued in the last three months. The average SPY price target of $733.65 implies 11.33% upside from current levels.
