Last week, U.S. stocks experienced a volatile week as the prior week’s selloff continued Monday before ending the week recovering most, but not all, of the lost ground. The main drivers of the market swings were Monday’s sharp sell-off triggered by a global unwind of the yen carry trade, a surge in the VIX to the highest level since the pandemic, and fears of a recession signaled by an inverted yield curve and the Sahm/McKelvey rules triggering. However, markets recovered most of the losses in the following days, as the Bank of Japan signaled it would not raise rates amid market instability, and some positive economic data on services, jobless claims, and the Atlanta Fed's GDP forecast. The bond market also rallied, pushing the 10-year Treasury yield to an eight-month low- on Monday before rising slightly through the week.
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