For the third time this month, a sell-off has pushed the S&P 500 below a level that matches its high-water mark from January 2018, meaning people who bought back then, during the biggest rally of Donald Trump’s presidency, remain stuck. Of greater interest to chart analysts, the index now sits just 7 points above lows set during earlier August plunges.
While none of the numbers are magic, analysts want to know if they’ll hold. Dip buyers stepped in when the S&P neared 2,840 twice before, fueled by optimism the economy is strong and the trade war resolvable. Whether they’ll be as confident after Trump tweeted that the U.S. would be “better off without“ China is an open question.
“You open up a trap door and then selling goes to the next level,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The mode of the market is, ‘sell now, ask questions later.’” At the same time, she said, “If politicians in China and the U.S. can craft a trade message that the market can find coherent, then that would alleviate some of the concern.”