The rally in stocks driven by the Federal Reserve’s dovish tilt and bets on a soft economic landing lost a bit of steam Thursday amid speculation the market has run too far, too fast.
After a surge that put the S&P 500 within a striking distance of its all-time high, the gauge saw a small gain as valuations and “overbought” levels suggest equities are vulnerable to a pullback. The Nasdaq 100 fell after an over 50% surge in 2023. Wall Street’s “fear gauge” — the VIX — pushed further away from an almost four-year low. Piles of derivatives contracts tied to stocks and indexes were due to mature Friday — which could amplify instability.