It’s been a wild week in global markets. And it’s only Wednesday.

U.S. stocks saw another day of swings, reflecting the new reality that volatility has returned to markets after an unusually placid 2017.

The Dow moved nearly 500 points during trading Wednesday before closing down 19 points, or 0.08 percent, at 24,893. The broader Standard & Poor’s 500-stock index didn’t move far off its baseline, closing down 13 points, or 0.5 percent. The tech-heavy Nasdaq struggled to stay in positive territory all day and lost 63 points, or 0.9 percent, by end of trading.

The yield on the 10-year Treasury bond rose Wednesday to close at 2.84 percent. The 10-year is a key indicator for the market because a 3 percent yield is looked upon by investors as a motive for people to flee the risk of stocks for the relative safety of bonds. When bond prices go lower, their yield increases.

“In 2018, volatility may be the new normal,” said Michael Farr, president of Farr, Miller & Washington, a D.C.-based money-management firm. “Nobody minds upside volatility. It’s the downside volatility that causes heartburn.”

Corporate earnings continued to impress as Disney and social media company Snap both beat expectations. With more than half the S&P 500 through earnings season, 78.5 percent are besting their targets, a sign of strength in the economy.


A trader works on the floor of the New York Stock Exchange on Tuesday morning. (Brendan Mcdermid/Reuters)

“The revenue results are encouraging and should gain strength in the coming quarters from currency translation,” said Joe Abbott, Yardeni Research’s chief quantitative strategist.

Industrials and financials were the only positive sectors in the S&P 500. The big loser was energy, which dropped when oil prices plunged more than 2 percent. Low crude oil prices hurt profits for oil companies.

Among the Dow’s top performers were Boeing, United Technologies and Walmart. Apple, Microsoft and Exxon Mobil were big drags on the blue-chip basket.

“We’re having a transition to a new normal, but it’s not the new normal everyone expected,” said Paul Ehrlichman of ClearBridge Investments. “We were expecting deflation and low growth forever. Now we are getting strong synchronized growth and signs of reflation. Markets are adjusting to one of the broadest recoveries we have seen in a decade.”

“We are transitioning to new leadership in the markets,” he said. “That’s all this correction is.”

Ehrlichman said investors were moving out of bonds and technology stocks — and into financial stocks and foreign markets.

President Trump, who was mum during the past three days of wild gyrations in the global markets, took to Twitter on Wednesday morning to weigh in: “In the ‘old days,’ when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!”

In trading overnight, Asia markets rebounded on the heels of Wall Street’s end-of-day recovery. But those gains were brief and vanished quickly, deepening questions about what comes next.

Japan’s Nikkei index and Hong Kong’s Hang Seng surged in early trading, then dropped, with the former closing up 0.16 percent and the latter closing down 0.89 percent.

Australia closed up 0.7 percent. Shanghai and Shenzhen closed down 1.8 and 1.2 percent respectively.

By afternoon in Europe, indexes were also creeping upward, apparently buoyed by Wall Street’s turnaround Tuesday. The Pan-European Stoxx 600 was up by more than 1 percent. London’s FTSE and Frankfurt’s DAX also moved higher.

The modest rebound — if you can call it that — helped calm nerves after a terrifying Tuesday that saw across-the-board drops in the Asia-Pacific region and Europe.

Experts expect more ups and downs to come. “I’m afraid panic was only eased temporarily,” said Zhu Zhenxin, chief analyst at Beijing’s Rushi Advanced Institute of Finance.

Zhang Ming, a senior economist at Beijing’s Chinese Academy of Social Sciences who warned about the potential volatility of the U.S. stock market in the Communist Party’s flagship People’s Daily a month ago, agreed. 

‘The market performance in recent days has proved my point and this phase of the correction has not finished,” he said, “Investors should realize the risks of a more volatile market.”

This week’s volatility actually started with good news. Last Friday, official U.S. data showed rising wages, renewing concern about inflation and rate hikes by the Federal Reserve. 

On Monday, the Dow saw a record-setting drop, which, in turn, led to a Tuesday sell-off that one analyst called “genuine carnage.”

People had been predicting that carnage for a while. The Dow was up over 26 percent from January 2017 to January 2018 — too good, many analysts warned. 

The big unanswered question hanging over Wall Street on Wednesday was: “Is the selling over?” Early trading seemed to point to more volatility, which means some sellers are out there.

“We think the market sell-off is likely over and the market will head up from here,” said Luke Tilley, chief economist at Wilmington Trust, the wealth and investment advisory arm of M&T Bank. “There is always a chance for more downward moves, but as long-term investors, we don’t try to time these market corrections. We are focused on spotting a downturn in the economy ahead of time, which we don’t expect in 2018.”

Many experts also worried that investors — encouraged, perhaps, by President Trump’s tweets about the stock market — seemed to believe the rally was closely related to the real economy. 

Andrew Zimbalist, an economist at Smith College in Massachusetts, said the volatility in the United States — and the impact on Asia — was “not surprising in the least” given what’s been happening. 

“The U.S. has been ridiculously bloated by the euphoria of Trump’s tax cut and deregulation,” he said.

“He overstimulated the economy. The inevitable consequence is higher rates, higher inflation and higher deficits.”

Rauhala reported from Beijing. Shirley Feng, Luna Lin and Yang Liu and Paul Schemm also contributed to this report.