After days of selling in the equity market that resulted in one of the sharpest three day drops for the S&P 500 (^GSPC) since World War II, stocks are in rally mode on Tuesday.
All three of the major averages are up about 4% or more, quickly building on gains early in the session. Some of the market’s high flyers of the past few years, which had recently been crushed in the market crash, are leading the way higher too. Nvidia (NVDA) is up nearly 8%, while Tesla (TSLA) has popped more than 6% and Meta (META) has added over 5%.
“At the slightest, whiff of good news, people come roaring back in because that FOMO [fear over missing out] never goes away,” Interactive Brokers chief strategist Steven Sosnick told Yahoo Finance. “It’s always there. No one, no one ever wants to miss a rally.”
While the S&P 500 didn’t officially enter a bear market on Monday as it narrowly avoided closing 20% off its recent all-time high, stocks are trading like they normally do in a bear market, or following substantial pullback.
“If you look back through history some of the biggest short-term rallies, have occurred during, during bear markets,” Sosnick said. “Down markets tend to see very big sharp up moves, because volatility does work in both directions.”
