S&P 500 bounces, concerns remain over market stability

The S&P 500 index experienced a 2.1% bounce on Friday, breaking a three-week decline of over 10%. This rally interrupted a significant market correction, which was driven by factors like weak consumer spending and concerns over economic growth. Despite the positive movement, analysts caution that a single day of gains does not guarantee a sustained recovery. The index remains below its recent highs and needs to rise further to confirm a trend reversal. Upcoming economic data, including retail sales, will be closely watched for signs of consumer behavior. Market valuations have adjusted, with the S&P 500's price-to-earnings ratio dropping from 22 to about 20. While this suggests some risk has been priced in, uncertainties remain regarding economic policies and their impact on market stability.