The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all closed higher by less than 1% on Monday, but all three experienced extreme sell-offs in intraday trading before mounting huge comebacks to close in positive territory.

Major Recoveries: The Dow was down more than 1,000 points at one point on Monday before making its biggest intraday comeback since March 19, 2020. The S&P 500 and Nasdaq secured their largest intraday comebacks since 2008. The Invesco QQQ Trust Series 1 (NASDAQ:QQQ) was down more than 4% at one point yesterday before closing green on the day.

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Crypto traders experienced the Monday round-trip as well. Bitcoin (CRYPTO: BTC) prices dropped to around $33,000 in intraday trading on Monday before rebounding to $37,000 late in the day.

More Downside Ahead? Unfortunately, the stock market comeback appears to have run out of steam on Tuesday morning. The SPDR S&P 500 ETF Trust (NYSE:SPY) opened down 1.4%, while the SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) opened down 0.9%.

Investors who bought the dip on Monday were feeling pretty good about themselves when the closing bell rang, but Morgan Stanley analyst Michael Wilson said Tuesday that “winter is here” for stock prices, and the market still has significant downside.

Wilson recommended investors play defense by rotating from consumer discretionary stocks to consumer staples.

Benzinga’s Take: The Federal Reserve’s interest rate decision and accompanying commentary due out on Wednesday will have a big impact on whether or not the market will rebound from recent weakness or continue falling. The bond market is currently pricing in an 89.8% chance of an interest rate hike in March, according to CME Group.

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