Last Thursday, the indexes closed 10 percent below record highs set Jan. 26. One of the factors cited by investors and traders was a surge in interest rates to levels not seen in years.
But Wall Street is seemingly learning to live with higher rates. Stock futures traded higher despite the 10-year Treasury note yield hitting a new four-year high before the bell. On Wednesday, stocks and bond yields rose together.
“We’re trying to reconcile an environment with higher rates and rising inflation,” said Ernie Cecilia, CIO at Bryn Mawr Trust. “Volatility is going to continue. We’re still trying to make a bottom but it’s going to take some time.”
Volatility has come back with a vengeance recently, following a year of unprecedented calm in the market. In its previous nine sessions, the S&P 500 has logged in seven moves greater than 1 percent. The broad index posted just eight 1 percent moves during all of 2017.