Taking stock of the market's roller coaster week

The stock market roller coaster ride this week was real.

Why it matters: This year was on pace to notch a rare milestone: a full 12-months without a pullback of more than 5% in the S&P 500 — until this week helped tip it further out of the running.

• Stocks have already recouped almost half of those losses.

Here's a snapshot ...

• Stocks have alternated between gains and losses of at least 1% for much of the past week — the longest wild stretch since June 2020, according to Bloomberg.
• As hints of a temporary debt ceiling truce trickled out on Wednesday, stocks staged the biggest midday comeback since February.
• Strategists say shelved fears about a federal debt default powered gains on Thursday (though, of course, no one can say for sure why the stock market does what it does).

Flashback: September typically isn't a good month for the stock market (it wasn't this year either). Historically, October hasn't been much better.

• "There's less risk-taking that happens at this time of year: People don't want to lose money, for whatever reason, at the end of the year," says Rick Rieder, BlackRock's chief investment officer of global fixed income.

Other than the calendar, there's a back-and-forth about how big of a deal the things on the latest worry list will be — like a prolonged spell of higher inflation.

What they're saying: "The number one question we get from clients is whether inflation is temporary or stays with us," Omar Aguilar, chief investment officer at Charles Schwab, tells Axios.

• "People are more worried about it than they were a couple of weeks ago," says Aguilar. Not helping: supply chain snafus that may be getting worse and the commodity price surge of recent days.

Then there’s the imminent taper. The Federal Reserve isn’t pulling out of the game altogether, but it will ease up on the massive bond purchases that have helped buoy stocks. No one knows yet the pace at which the Fed will do it.

• ”The Fed is going to take its foot off the accelerator a little, so instead of driving 125 miles an hour, they're going to be driving 100 miles an hour. That's still fast,” says Scott Wren, a global equity strategist at Wells Fargo Investment Institute.

The big picture: The S&P 500 is nearly double its pandemic-era low.

• And for every market-watcher who says risks abound, there’s another who says have no fear.

What's next: Earnings start to trickle out in earnest next week.

• The number of companies telling Wall Street to pare back profit expectations has jumped compared to the prior quarter, according to FactSet.
• Still, they don’t outnumber those that have said upcoming results will be even better than initially forecast.

This post has been updated to state that the S&P 500 is nearly double its pandemic low.