It’s been a tumultuous week for the stock market, and signs of a slowing economy are fueling fears of a recession, leaving some investors wondering what’s next.
A rate hike from the Bank of Japan sent the Japanese yen plunging more than 12% Monday, its worst day since 1987.
This sparked a global selloff: The Dow tumbled 1,000 points, and the S&P 500 saw its worst day in nearly two years.
Plus, last week’s disappointing jobs report added to the jitters on Wall Street.
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But major stock indexes bounced back Thursday following news of falling unemployment claims and mortgage rates.
Steve Sosnick, the chief strategist with Interactive Brokers, told Scripps News average investors shouldn’t panic.
“My main comment to people has been to breathe because a lot of what’s going on is happening overseas and sort of indirectly affecting us investors,” Sosnick said.
Caleb Silver, the editor-in-chief of Investopedia, also said if you have your 401k or your IRA in the stock market, there are things you can do.
“You can set a limit on how much you’re willing to take a loss and put stop orders in on your mutual funds or your index funds,” Silver said. “You can also just stand and let it happen and buy in when prices are cheaper. You can also rebalance inside your retirement accounts or your investment accounts.”
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Although Wall Street is still on edge amid signs of a potential recession on the horizon, Silver says volatility comes with the territory.
“That’s just the price you pay to be an investor, especially a long-term investor, but we get volatility especially around election years as well,” Silver said.
Wall Street was hoping that slowing inflation would lead the Federal Reserve to cut interest rates.
Some analysts are warning of a recession and believe the state of the economy will be revealed in the next few weeks including through new data on inflation to be released Wednesday.
