Moody's Just Downgraded the United States' Pristine Credit Rating -- Here's What History Says Happens Next for Stocks
A seemingly major event for credit markets has historically sparked a sizable directional move in equities.
There's never a dull moment on Wall Street. Earlier this year, the bulls could do no wrong, with the benchmark S&P 500 (SNPINDEX: ^GSPC) climbing to an all-time record high. Not long thereafter, a historic bout of volatility arrived.
In April, the steady-footed S&P 500 endured its fifth-worst two-day percentage decline of the last 75 years. But true to form, less than a week after this mini-crash, the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), the S&P 500, and the growth-focused Nasdaq Composite (NASDAQINDEX: ^IXIC) all registered their largest single-day point gains since their respective inceptions.
Short-term movements in the Dow Jones, S&P 500, and Nasdaq Composite are aptly described as predictably unpredictable. It's simply a matter of which shoe drops next.
