Okay so this crazy. Yesterday market was absolute disaster. Today it bouncing back up. And meantime inflation just hit highest number in three years. Make no sense but that what happening.
Wednesday Was Really Bad – Today Fighting Back
So let me tell you how bad yesterday was. Dow drop 953 point. That like 1.9% down. S&P 500 lose 1.6%. Nasdaq almost lose 2%. That not small number – that big selling. Chip stock really getting murdered. Like, those semiconductor company that was flying high couple month ago? They getting killed.
But then today morning come and what happen? Future going up! S&P 500 future up 0.4%. Nasdaq future up 0.6%. Dow future up like 120 point. So after getting smash yesterday, today people buying back. Classic “buy the dip” thing.
I not sure if this going to last when market actually open, but at least people trying to be brave this morning instead of selling more.
Iran Situation Still Mess
So the war thing still happening. US did more strike Wednesday. Like, they not stop. They keep hitting Iran. And Trump come out and say Iran “taking too long” to make deal and they going to “pay the price.” So basically he saying more attack probably coming if Iran not cooperate.
But here the weird thing – when US say the strike operation done, when they say “okay we finish attacking for now,” then investor feel little bit better. Like, oh okay, maybe this not turn into huge war. Maybe just military strike and then stop. So that why future going up – people thinking maybe the worst over.
But that could be wrong thinking. Could be more fighting coming. Nobody really know. But investor want to buy so they buy.
Inflation Just Hit Highest In Three Year – And That Bad
Okay so inflation number come out and it 4.2% per year. That highest since like 2023 or something. Three year! That long time. Price going up, that bad for people, that bad for economy.
Usually when inflation go up, stock market go down because people think interest rate going to go up. And interest rate up mean borrowing money expensive, mean company profit less, mean stock worth less. That how it supposed to work.
But Trump see inflation number and he say “I love the inflation.” Like… what? You love inflation? That weird thing to say. But he say it anyway.
So Why Stock Going Up If Inflation Bad?
This confusing part. Usually:
- Inflation up = Interest rate go up = Stock go down
But what happening now:
- Inflation up = But stock future going UP?
Why? Maybe couple reason:
One – maybe investor think “okay inflation bad but at least we know now. Maybe worst already happen. Maybe we can plan for future now.”
Two – maybe they think oil price going to go down if war stop. Oil high right now because Middle East scary. If war stop, oil come down, inflation come down, life get better.
Three – maybe they think “worst already priced in.” Like, yesterday big selloff already happen, so today maybe enough time to bounce back.
Four – maybe they just stupid and buying because number went down so they think time to buy. Classic investor move.
The Situation Right Now
So we have three thing happening at same time:
- War still happening – people scare
- Inflation highest in three year – bad for economy
- But stock futures bouncing – people buying dip
This not make complete sense but that what market do. Market confusing. One day down big, next day up. Up down up down.
If war stop and oil price come down, maybe for S&P 500 inflation come down and stock really go up. That probably what investor hoping. But if war get worse, or inflation stay high, then stock probably go back down.
That basically where we at. Bouncing between hope and fear. Hoping war end soon, hoping inflation come down, hoping interest rate not go up. But also scared because inflation already high and war still happening.
Thursday open going to be interesting. If stock really rally or if this bounce just fake thing that die when market open. We see.