Uncertainty has been shrouding the stock market for quite some time now. Efforts guessing the next turn of events in this capricious market have been futile.

This uncertainty is clearly reflected in the price movement of all the major indices. On one hand, the Nasdaq Composite Index, S&P 500 and Dow Jones Industrial Average have scaled over 7%, 6.5% and 6%, respectively, over the past month. On the other, the indices are down 5.3%, 1.2% and 1.1%, respectively, year-to-date.

A Crazy Ride

As the saying goes, “The only certainty is that nothing is certain!” The stock market is presently on a roller coaster ride hit by a multitude of factors.

This year started on a dismal note, with recession fears looming large, owing the prolonged slump in oil prices, no turnaround in China’s economic scenario and muted global growth overall.

However, oil prices have been witnessing a steady recovery from the late January lows and have rallied nearly 45% to around the $40 per barrel mark. However, the prospects of the oil market are bleak as the massive supply glut hint at a potential loss of stability.

Meanwhile, the U.S. stock market has completed its seventh year of “Bull Run,” notwithstanding the unrelenting global issues. As the bull market enters its eighth year, gains are expected to be muted, owing to increased volatility.  

Further, investors are waiting with bated breath for Fed’s decision on interest rate hike at its meeting on the 15th and 16th of March.

Thus, at this point, analysts and market watchers stay divided over where the market is headed. However, the intermediate position seems to be most plausible and markets may witness higher volatility in the days ahead.

What Should Investors Do?