The markets had been experiencing steady upward momentum for some time, but this came to a halt as traders showed caution in response to strong economic data. This shift in sentiment led to a period of high volatility, with extreme market moves occurring throughout the week. Despite a Friday rally in equities that prevented the worst week for cross-asset investors since 2022, a series of dramatic fluctuations occurred.
On Monday and Tuesday, both stocks and bonds experienced their most significant synchronized drop of the year. On Thursday, the largest reversal of an S&P 500 rally since August occurred, adding to the rollercoaster week for investors. Additionally, an exchange-traded fund tracking long-dated Treasuries had its worst week since October, as 10-year yields rose to their highest level in over four months.
