Wednesday's moves were enough to give any investor whiplash. The Dow Jones Industrial Average traded 743.89 points lower at one point during the session. The S & P 500 and Nasdaq Composite shed as much as 1.6% and 1.4%, respectively. Those declines came after new consumer inflation data poured cold water on any lingering hopes that the Federal Reserve might slash interest rates as much as half a percentage point at next week's policy meeting. The sell-off didn't last, however.
"Besides seasonal headwinds, we view weakness thus far in the month as an extension of the mid-summer positioning-driven downturn. These kinds of drawdowns typically follow a 'W'-shaped pattern." Iachini noted that investments by individuals into stocks have begun to slow, but that Main Street hasn't capitulated yet.