By Vildana Hajric / Bloomberg
December 27, 2018

(Bloomberg) — Volatility returned to U.S. markets, with stocks roaring back from the lows of the day to close higher after flirting with a bear market. Treasuries rose and oil slipped below $46 a barrel.

The S&P 500 and Dow Jones Industrial Average turned green in a late surge after trading negative for most of the day, with a more than 800 point swing up by the Dow in less than two hours. On top of Wednesday’s 5 percent surge, it was the biggest two-day rally in the S&P since August 2015.

“It’s hard to explain moves like today and yesterday and the last month,” said Sean O’Hara, president at Pacer ETFs. “From a time perspective, it’s a historic bull market and when you get that far into the cycle, people get more jittery.”

The S&P 500 has been careening toward its worst month of the record bull run and is down about 15 percent in the quarter as everything from higher interest rates to political turmoil in Washington to concern about global growth hammer at investor sentiment. Havens came back in vogue, with Treasury 10-year yields slipping below 2.8 percent, and gold climbing with the yen.

The euphoria of equity investors evaporated earlier from Wednesday, when investors cheered a reminder of the American consumer’s strength and got reassurance on the tenure of the Federal Reserve chief and progress on U.S.-China trade talks. While there was no obvious catalyst for the return to selling that took stocks within a whisker of a bear market, the moves of the past few days sent volatility soaring.

Elsewhere, WTI crude oil prices gave up a slice of the more than 8 percent gain from the previous day. Losses in utility companies and carmakers dragged the Stoxx Europe 600 Index into the red. Asian shares were mixed, though Tokyo’s Topix Index posted the biggest advance in two years.

“After a day like yesterday, you’d like to say, ‘Oh, that’s it. That kind of a move, that’s got to be the bottom.’ But you know what?” Michael Antonelli, equity sales trader at Robert W. Baird, said on Bloomberg TV. “We just don’t know yet.”

Read more on the latest twists and turns: Plenty of big rallies occurred during a bear-market downturn A history of U.S. presidential comments on stocks Insiders are pouring money into equities Three crazy statistics on a wild day of trading Valuations tumbled before the Wednesday rallyAnd see more analysis in our Markets Live blog.

Here are some events investors may focus on in coming days:

Baker Hughes releases its weekly data on active U.S. oil rigs on Friday. Monday is year end. Brazil’s new president is sworn in on Tuesday.And these are the main moves in markets:

Stocks

The S&P 500 Index rose 0.9 percent as of 4:10 p.m. New York time. The Nasdaq 100 rose 0.4 percent and the Dow Jones Industrial Average cut its decline from more than 600 points to close up 1.1 percent. The Stoxx Europe 600 Index fell 1.7 percent to the lowest in more than two years on the biggest fall in more than a week. The MSCI All-Country World Index dropped 0.2 percent. The MSCI Emerging Market Index climbed less than 0.1 percent, the first advance in a week.

Currencies

The Bloomberg Dollar Spot Index declined 0.4 percent. The euro rose 0.8 percent to $1.1438. The Japanese yen jumped 0.4 percent to 110.90 per dollar. The British pound rose less than 0.1 percent to $1.2638. The MSCI Emerging Markets Currency Index gained 0.2 percent, the largest rise in more than a week.

Bonds

The yield on 10-year Treasuries fell four basis points to 2.76 percent. Germany’s 10-year yield decreased two basis points to 0.23 percent, the lowest in a week on the largest dip in almost two weeks. Britain’s 10-year yield increased five basis points to 1.31 percent.

Commodities

The Bloomberg Commodity Index decreased 0.5 percent. Crude oil fell 2.3 percent to $45.18 a barrel. LME copper jumped 0.6 percent to $5,969 per metric ton, reaching the highest in more than a week on the first advance in more than a week and the biggest increase in more than two weeks. Gold increased 0.7 percent to $1,275 an ounce, the highest in more than six months.

Contact us at editors@time.com.

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