Following a wild week that saw U.S. stocks soar to their best day since 2022 and Japanese stocks plummet to their worst loss since Black Monday in 1987, modest gains on Friday nearly brought Wall Street back to its starting point for the week.
The week's severe loss was reduced to a hardly noticeable 0.04 per cent when the S&P 500 gained 0.5 per cent. Both the Nasdaq composite and the Dow Jones Industrial Average increased by 0.5 per cent and 51 points, respectively.
After falling more than 10 per cent below the record during the week, the S&P 500 rebounded to within 5.7 per cent of its all-time high, which it had set last month.
A measure of fear on Wall Street momentarily surged towards its highest level since the 2020 COVID crash, marking a vicious return of volatility to a market that had been rising smoothly.
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Other global markets
Earlier in the day, many other global stock markets saw their indexes rise. Since last week, they have also been frantic due to several factors colliding at once.
Japanese nikkei shuttered 35,025.00 points, gaining more than 193 points, on the japanese stock exchanges. The Japanese index index rallied 0.56 per cent yesterday.
Japanese trade strategy
First and foremost is the value of the Japanese yen, which abruptly strengthened and caused traders and hedge funds to rush out of a popular trade in large quantities.
They had been investing their extremely cheap loans in Japanese yen elsewhere in the world. However, the Bank of Japan's increase in interest rates caused many traders to stop at the same time, which caused the world markets to collapse.
The midweek promise by a top Bank of Japan official to hold off on rate increases as long as the markets remain 'unstable' helped stabilise the yen.
Cues for next week's movement
Next week's reports could cause further market fluctuations. An update on the amount of money consumers are spending at US retailers is expected on Thursday.
Lower-class households have been finding it difficult to keep up with prices that are still rising, but analysts anticipate that the report will indicate that growth has resumed following a June retail spending stall.
