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Data: FactSet, Chart: Axios Visuals

The S&P 500 hit its highest level ever earlier this month — but as September closes out, the index is teetering on the brink of correction territory.

Where it stands: As of Thursday’s close, the S&P 500 has sunk 9.3% below its record high. Slight gains on Thursday pushed it a bit further away from the 10% decline that would mark a correction — but investors say volatility could be here to stay.

What’s going on: The pullback comes as pessimism grows about the economic recovery — and whether the stimulus Wall Street pinned its hopes on will ever arrive.

  • The tech stocks that powered the market higher this year have dragged down the S&P 500 in recent weeks.
  • The index is on track for its worst September since 2008, Brian Belski, BMO Capital Markets' chief investment strategist, points out in a note to clients.
  • It’s a reversal from the stock market’s near unstoppable surge, boosted by the Fed’s unprecedented support for the market and the economy. The index is still up 30% since it bottomed out when the pandemic hit in March.

What to watch: Next week’s job report will shed more light on the economy.

  • Early estimates indicate the economy likely added 900,000 jobs in September. Job growth has slowed every month since June — when the economy added 4.8 million payrolls.

Go deeper

Dion Rabouin, author of Markets
Oct 22, 2020 - Economy & Business

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