- Volatility gripped financial markets, amplified by the quarterly expiration of options and futures contracts.
- The S&P 500 continued its weekly decline. With the holidays quickly approaching, this could have been the final session of 2021 with enough liquidity for investors to trade in and out of large positions.
- The dollar rose after Federal Reserve Governor Christopher Waller stated that interest rates could rise as early as March as a result of the Fed's decision to end asset purchases earlier than planned.
- The yield curve flattened, with the spread between 5-year and 30-year bonds close to Friday's lows.
- In the last few days, central banks in the United States and Europe have shifted – at varying rates – toward tighter policy. They now prioritize price control over protecting output and employment from further pandemic fallout. With traders rethinking their bets for the coming months, some analysts have warned that the drop in long-term yields means economic growth is in jeopardy and that the Fed will need to end its upcoming tightening cycle sooner rather than later.
- Following the rally from pandemic lows, investors are wondering if stocks are in for a rough patch. It has also drawn attention to high-valued stocks, such as those of technology companies. The group of marquee names, including Apple, Tesla, and Amazon have experienced wild swings, surging in the immediate aftermath of the Fed's decision on Wednesday, tumbling the next day, and posting minor losses on Friday.