U.S. stocks bounce back after two-day plunge

Global stock indexes, which had experienced similar declines, recovered slightly ahead of Friday's open, offering some encouragement that markets had stabilized.
by Jason Abbruzzese /  / Updated 
Image: Traders work on the floor of the New York Stock Exchange (NYSE) on the morning of Oct. 11, 2018 in New York City
Traders on the floor of the New York Stock Exchange on Thursday morning. Spencer Platt / Getty Images

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U.S. stocks avoided a third-straight day of steep losses with major indexes rallying on Friday.

The Dow Jones Industrial Average rose 1.2 percent, while the tech-heavy Nasdaq added 2.3 percent and the broader S&P 500 rose 1.4 percent.

The Dow had shed more than 1,300 points over the past two days, with the S&P and Nasdaq also dropping sharply on Wednesday and Thursday.

Some analysts pointed to rising interest rates as the cause of the stock dip. The Federal Reserve has raised short-term interest rates three times in 2018, moves that can have a secondary effect in other parts of the U.S. economy and investment markets.

President Donald Trump has sharply criticized the moves by the Fed, saying the central bank was "going loco" and linking its moves to the stock declines. Previous presidents have hesitated from politicizing the Fed's actions.

Market unrest has also been linked to the ongoing trade dispute between the U.S. and China, which had recently escalated, though a report from The Washington Post on Thursday said Trump and China's leader, Xi Jinping, would meet at next month's G-20 summit.

U.S. economic indicators remain largely positive, with the most recent jobs report from the Department of Labor putting the unemployment rate at 3.7 percent, the lowest since 1969. An uptick in wage growth also showed that the tightening labor market could finally be giving a boost to low-income workers.

For the past nine years, U.S. stocks have been on their longest bull market run since World War II, consistently adding value while avoiding any major declines. The Dow has more than quadrupled in value since March 2009.

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