First Quarter in U.S. Stock Funds: The Return of Volatility
Growth stocks held on to small gains as Amazon continued to rise.
The markets were jolted back to reality in the first quarter after the halcyon days of 2017.
Volatility returned with a vengeance, with the markets making some of their biggest moves in months. After going all of 2017 without a move of 2% or more in absolute terms, the S&P 500 had six such moves in the first three months of 2018, capped by a 4% decline on Feb. 5. Simmering inflation fears, the prospects of a trade war with China, and revelations of Facebook's (FB) data-harvesting activities roiled the markets during the period. As a result, the S&P 500 fell 2.1% during the quarter, its first quarterly loss since the third quarter of 2015. Small-cap stocks fared a bit better as a class during the market's swoons, though the Russell 2000 Index still lost 1.2% in the period.
Tony Thomas does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.