The Dow is now in its fifth consecutive day of losses, falling more than 3% this week.
“There is more future volatility ahead,” said Bruce Monrad, portfolio manager for Northeast Investors Trust. “It should increase as the Fed starts thinking about raising rates and once it starts declining.”
These market rounds may become more routine, which may alarm investors who have become accustomed to being calmer on Wall Street.
“Volatility has been very low because the market generally supports improved earnings,” said Marco Pirondini, head of equities at Amundi USA. “But there is always some speculation in other corners of the market.”
The VIX, which many investors call Wall Street’s “fear gauge,” is now hovering around pre-pandemic levels in February 2020. It has been steadily declining since it peaked in March last year. The VIX has fallen by almost 15% in 2021.
But the VIX rose more than 10% on Friday morning and some experts warn that the summer and second half of 2021 could be a little more bumpy than the first six months of the year.
Schuringa said he is concerned about the “speculative excess” of meme stocks as well as the technology sector, and thinks a broader market correction could be on the horizon.
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