U.S. stocks have staged a remarkable rebound from their early-August losses, with all three major U.S. barometers heading for their best weeks since Nov. 3, according to Dow Jones Market Data.
The Dow was up 1065.52 points, or 2.7%, this week to 40,563.06.
The S&P 500 was up 199.05 points, or 3.7%, this week to 5,543.22.
The Nasdaq Composite Index was up 849.19 points, or 5.1%, to 17,594.50
Stocks were little-changed on Friday in relatively quiet summer trading. But equities may not be out of the woods yet, according to Nathan Hoyt, chief investment officer for Regent Peak Wealth Advisors.
While this week’s batch of economic data might have helped soothe investor concerns about a looming recession, the next selloff could be only one more weak labor-market print away, Hoyt said.
Geopolitical risks and an uncertain U.S. political landscape could also cause problems for markets, he added.
“Investors are still looking for any reason to sell off,” Hoyt said Friday, in an interview with MarketWatch.
So far, technology stocks have led the recovery from last week’s washout, which doused enthusiasm for small caps and other beneficiaries of the July rotation trade.
“People showed they weren’t ready to let go of their large-cap growth stocks that have done so well,” Hoyt said.
Whatever happens next, Hoyt doubts markets will see a return of the smooth escalator ride higher that characterized much of the past 18 months. Instead, he expects the market to “grind higher” between now and the end of the year, punctuated by more bursts of volatility.