For almost 40 trading days, the market traded within a 1% range. This is historically a small range. However, the narrow range evaporated on Friday, when the S&P fell over 2% on news that the Fed would likely raise interest rates in their meeting this month. In yesterday’s trading, markets rose on the relief that a Fed official believes the reasons to increase interest rates are not as strong as a few weeks ago (given weaker data that has come in). Markets like low interest rates, so the idea of keeping rates low sent the market to a rally in Monday trading.
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