Review & Preview: Triple Witching

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Spooky Season. The Dow Jones Industrial Average really needs to shake off this bad juju.

The blue-chip index fell 122 points, or 0.2%, on Friday, wrapping up its worst week since March, according to Dow Jones Market Data. This is the Dow’s third straight week of declines.

The Nasdaq Composite and S&P 500 fared better, closing the day 0.4% and 0.2% higher, respectively, although the indexes just barely eked out those gains toward the end of the session.

“Investors are genuinely conflicted between oil driven inflation pressure that is pushing yields higher and tightening financial conditions, and a supportive macro backdrop, which is driving historic earnings growth,” writes Mark Hackett, chief market strategist for Nationwide.

And, as my colleague Connor Smith notes, today is a “quarterly triple witching day”—that’s when stock options, stock index futures, and stock index options all expire on the same day. That can lead to an uptick in volatility and “wacky trading,” Connor notes.

The Dow has averaged a move of 0.7% in either direction on triple witching days going back to 2020, according to Dow Jones Market Data, while the S&P 500 has averaged a move of 0.8%. Both indexes have averaged a loss of a little more than 0.4% on triple witching days.

It’s all feeling rather eerie. The silver lining is that earnings season is just around the corner. We’ll see then if corporate America can keep delivering the gains markets have become so used to.

Watch our TV show on Fox Business Saturday and Sunday at 9:30 and 10:30 a.m. ET. This week, Saira Malik, chief investment officer at Nuveen, on how to invest amid higher interest rates.

Barron’s newsletter portfolio is growing. Barron’s Global Signals is a premium weekly newsletter devoted to helping investors navigate volatility with confidence. Each week we connect how global risk, policy shifts and international developments impact your portfolio. You can subscribe to Barron’s Global Signals .

Company

Last

Chg

Chg%

Dow Jones Industrial Average

51,682.64

-95.40

-0.18%

S&P 500 Index

7,650.50

12.74

0.17%

NASDAQ Composite Index

26,522.55

104.25

0.39%

Market Data as of

The Hot Stock: Coinbase Global +11.7%
The Biggest Loser: Nucor -6.3%

Best Sector: Information Technology +0.8%
Worst Sector: Utilities -1.4%

Created with Highcharts 9.0.1Friday, Sept. 18Index performanceSource: FactSetAs of Sept. 18, 4 p.m. ET

Created with Highcharts 9.0.1Sept. 18-0.6-0.4-0.200.20.40.6%Nasdaq CompositeS&P 500Dow industrials

This Week’s Magazine

Illustration: Illustration by Nicolas Ortega

The Calendar

The Federal Reserve Bank of Chicago releases its National Activity Index for August. Consensus estimate is for a -0.6 reading, roughly even with the July figure. Readings below zero suggest that the national economy is growing below historical trends; while positive values indicate above-average growth.

— Dan Lam

What We’re Reading Today

Join Barron’s Live at noon ET on Monday. The U.S. economy is relatively stable for now. But inflation continues to be a problem and the intensifying conflict in the Middle East is a risk investors cannot ignore. Barron’s Senior Economics Writer Megan Leonhardt talks with Robert Sockin, chief U.S. economist at PGIM, about what economic trends he’s watching carefully, the latest decision from the Fed and how the U.S. economy is looking ahead of the midterm elections.

Barron’s Live features timely and actionable insights for investors. We give you behind-the-scenes conversations with the newsroom, connecting you with our editors and reporters covering the markets, the economy, and more.

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