U.S stocks rallied to end a volatile Friday, cutting into two weeks of steep losses.
The Dow Jones industrial average closed 462 points higher Friday, a 1.9 percent gain, after shedding 10 percent of its value in two weeks. The Nasdaq and S&P 500 also jumped upward to end Friday, with 1.4 and 1.5 percent increases, respectively.
The three major indexes swung wildly between losses and gains Friday as investors grappled with an increasingly volatile market. The Dow reached as low as 23,360 and as high as 24,382 before closing at 24,190.
Stocks have fallen rapidly since Friday, Jan. 26, when the Dow reached a record high 26,066 points before a massive sell-off began the following Monday. The Dow and S&P had lost 10 and 12 percent of its value by Thursday, while the Nasdaq had lost 9.7 percent. A 10-percent loss is considered the formal threshold for a stock market correction.
Investors fear that low unemployment, increasing U.S. growth and rising wages will spur the Federal Reserve to raise interest rates, which would boost the cost of borrowing money. Bond yields have spiked and the turmoil in U.S markets has brought down global stocks.
The Dow closed 1,033 points lower on Thursday, the second day of the week it has experienced a four-digit loss. The Nasdaq lost 274 points on the day (3.9 percent), while the S&P 500 closed with a 100-point loss (3.75 percent).
Thursday’s close was the second time in history the Dow has lost more than 1,000 points in one day, after falling 1,175 points on Monday.
Even so, the rough stretch for U.S. stocks is far from the 22-percent plunge that set off the 1987 stock market crash.
While President Trump warned investors Wednesday that selling stocks was a “big mistake,” other administration officials and congressional allies have been more optimistic about the shift.
Treasury Secretary Steven Mnuchin said Tuesday the stock slide was “a normal market correction, although large.”
“We are very focused on the long-term economic growth and we believe the policies we’ve enacted including tax reform are very positive,” Mnuchin said, noting the stock markets’ gains since President Trump’s inauguration.
“I don’t think these types of moves, given how much the market has rallied, pose systemic risk.”
Economic data released last week showed a better-than-expected increase in jobs, record wage growth and expanding economic growth. Republicans have cited the market plunge as proof the Trump administration’s economic policies are working.