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After its worst day in almost two years, the S&P 500, and other major indices, gained back some losses on Tuesday. The bounce back for U.S. stocks came after Japanese equities posted their best day since 2008, soaring ~10.8%. Higher unemployment, weak tech earnings, and the view that the Fed could be behind the curve all contributed to the initial pullback, and although the rebound seemed to create a semblance of calm after a day of chaos, we don’t believe investors’ initial concerns have fully subsided.

The correction came after several months of low volatility and steady returns, and the bounce was likely fueled by positive corporate earnings and a wave of dip buying, which distracted investors from recessionary fears. Tuesday’s gains reduced chances that the Fed will take action ahead of September with a potential “emergency rate cut,” but, regardless, their next monetary policy decision is imminent. The market stands to see how they land the plane, and until then, volatility, an unfortunate but natural part of investing in equity markets, is likely to continue.