Never-Ending Stock Market Churn Keeps Pushing Bottom Targets Lower

Week after week of on-the-fly calculations about the intensity of inflation and the likelihood of a recession are preventing markets from finding equilibrium. The churn is spurring increasingly worse forecasts for when and where the volatility will cease.

Turbulence remained the rule Tuesday. After sinking more than 2% earlier in the session, the S&P 500 erased its decline to eke out a small gain. It’s the fourth time in 2022 that the index reversed an intraday drop of that magnitude, more than in any year since 2009.

Speculative technology shares led the rebound, with the ARK Innovation ETF (ticker ARKK) rallying over 9%, as traders sought bargains in the beaten-down sector and lower yields eased pressure on companies that have yet to make profits.

The reversal occurred even as the drumbeat of bearish calls grew louder. In a survey by Deutsche Bank AG conducted last week, 72% of respondents expected the S&P 500 to fall to 3,300 first, rather than rallying to 4,500. The gauge closed at 3,831.39 on Tuesday. Jonathan Golub at Credit Suisse Group AG just became the latest Wall Street strategist to downgrade his market outlook.