In assessing yesterday's stock market outlook, we opined that the lone constant likely would be elevated volatility. And that proved to be the case. On point, after suffering a 606-point meltdown on Monday, headlined by a range of major ills ranging from lingering trade disputes, economic problems in the euro zone, political headwinds at home, worries about looming Federal Reserve monetary policy, and problems in the tech space, the Dow Jones Industrial Average began the latest session nicely to the upside. However, in minutes the sellers were out again, dragging that 30-stock index to a morning worst loss of nearly 200 points.

The market then steadied itself, with the buyers regrouping in a matter of minutes, and by late morning, we were back up by nearly 125 points in the Dow. The averages then faltered anew, falling back to the session lows by early afternoon before again trying to shift course in another rally attempt, which would falter once more in mid-afternoon. The comeback launched in the morning followed comments by White House economic advisor Lawrence Kudlow who confirmed reports of renewed talks between the United States and China on trade. The NASDAQ was performing better on selective strength in the semiconductor space.

The selling on Monday also was fueled by a sharp drop in shares of iPhone behemoth Apple (AAPL – Free Apple Stock Report), with that stock backtracking on worries about slowing sales. Apple stock was again volatile yesterday, alternating rising and falling, with a consequent impact on stock market sentiment. Of course, it is not just Apple, but the entire tech group that is gyrating. For yesterday, though, it seemed to be renewed hopes on the trade front that gave the bulls some hope of stopping the latest decline. Other worries that continue to affect traders include, as noted, concerns about Federal Reserve monetary policies and political uncertainty at home.

Stocks have been volatile for weeks now, as traders grapple with these lingering trade fears and worries about rising interest rates. In the case of the latter, such concerns evolved after last week's FOMC meeting. Although the central bank kept rates unchanged at that time, it did suggest that a new round of rate hikes would be coming soon, which many have been taken to mean that such a rise would be approved at the December Fed meeting. Then, there is the fear of a slowdown abroad. That concern has helped to push oil prices sharply lower in recent weeks. Yesterday's drop in crude prices made it 12 days in a row of falling quotations.

As to the stock market, it continued to go back and forth as the afternoon progressed, but remained largely in the minus column throughout the remaining hours of the session weighed down by the assorted ills mentioned above. As the final bell sounded, the Dow was off by an even 100 points, having closed about 100 points from its low, but nearly 200 points from its high. The S&P 500 Index and the small-cap Russell 2000 were lower, too, but just incrementally so, while the NASDAQ closed unchanged. Breaking things down, gaining and losing groups were about even, with a few more individual stocks down than up on the NYSE.

Finally, oil prices again took it on the chin, falling for a 12th consecutive session. In all, crude is off 23% in the past month, or so, entering bear market territory. Interest rates, meantime, edged lower on global fears. Looking ahead to a new day, now, we see that stock in Asia were mostly lower in overnight trading, while in Europe, the leading bourses are moving a bit lower, as well, so far this morning. Also, oil prices are basically flat and Treasury note yields are off narrowly. In the futures markets, the early read on U.S. equities suggests a mixed opening when trading resumes.

– Harvey S. Katz, CFA

 At the time of this article’s writing, the author did not have positions in any of the companies mentioned.