>> A rollercoaster ride on Wall Street this week ended Friday with more twists and turns to keep investors on the edge of their seats. The Dow swung wildly, surging at the open, then dropping 500 points in the afternoon. Only to rally back by the end to close with a 300 point gain.
I'm Conway Gittens in New York. Analysts are not yet ready to call an end to the selling and are looking at the direction of interest rates. So far, interest rates have yet to breach the peak seen earlier this week, and that is providing some relief for the stock market.
So why is the bond market so important to the stock market all of a sudden? It all boils down to two reasons says Reuters investments reporter Trevor Honeycutt.>> For the first time, we're actually really seeing bond yields start to become competitive with the yields that you get just from holding the S&P 500.
And so that means that more people are going to be attracted to the bond market who have spent the last few years in stocks. And in addition to that, we've got more government borrowing, right? We've got a tax bill that came out recently. And we've also got a budget deal that was struck between Republicans and Democrats.
And so what that means is that the government has decided that it's going to be spending more money. They're gonna be issuing more bonds. And we might actually have to see yields rise further as more bond supply comes into the market.>> The competition for capital means that after enjoying nine years of dominance, stocks are no longer the only game in town.
And that means more volatile days ahead.