Q4 stock market outlook highlights need for volatility, caution advised for potential short-term volatility

From Nasdaq: 2024-08-11 19:10:00

Stock market history shows that volatility is a necessary part of wealth accumulation. Leverage and recency bias can lead to significant losses for amateur investors. A 5% correction in the S&P occurs an average of 3.4 times per year, while 2024 has been less volatile than usual, with a 12% gain so far.

The recent 8.49% S&P correction is the second 5%+ correction of the year. Despite the pain felt by investors, historical data suggests this correction is within normal bounds. The Volatility Index (VIX) spike, the third largest since 2000, typically indicates a long-term market bottom is approaching.

Monitoring the S&P 500 and VIX for market clues is essential. Tech stocks like Nvidia and defense names like Northrop Grumman should be watched closely for signs of market direction. A cautious approach is advised, especially with the potential for short-term volatility.

Investors should keep an eye on stocks in the hydrogen energy sector, a rapidly growing industry set to reach $500 billion by 2030. Zacks Investment Research is offering a special report on three companies poised to lead in this sector. Consider these emerging powerhouses for long-term investment potential.



Read more at Nasdaq: Q4 U.S. Stock Market Outlook & Road Map