As investors await signals from Federal Reserve officials on whether the central bank will take action against the tumultuous bond market, major indexes are self-assured to accelerate their gains.
With bond yields declining, the Dow Jones rose 2%, heading for its biggest gain in nearly four months.
Raising rates last week increased concerns about inflation and rich equity valuations.
Additionally, the manufacturing activity indicator revealed that the economy is starting to pick up speed.
Several hours before the opening bell, stock futures were already pointing upwards. Wall Street is hoping to bounce back this week after a down week last week.
The QQQ, RUT, and SPX all have insulation at key percentage levels.
Potential $SPX support levels coming into play early in today’s session.
Such observations, particularly as it pertains to VIX behaviour, were timely on the heels of Thursday’s 35% rise in the VIX. Amid this volatility spike, the SPX fell sharply to a new low, and for the second time in less than a month, it touched it’s three-month channel’s bottom. The SPX’s end-of-month pullback mirrors the late-January sell-off, as is evident from the chart below.