Stocks inched up slightly on Wednesday following the biggest one-day decline in more than two years. The S&P 500 was up 0.4% during morning trading, while the Dow Industrial Average gained 88 points or 0.4%. The Nasdaq Composite inched up 0.5%.
This is after the Dow fell more than 1,200 points Tuesday, or nearly 4%, while the S&P 500 was down 4.3%. The Nasdaq Composite dropped 5.2%. Tuesday’s selloff came after the latest Consumer Price Index report revealed that inflation rose 0.1% over the month despite declining gas prices.
“Tuesday’s selloff is a reminder that a sustained rally is likely to require clear evidence that inflation is on a downward trend,” wrote Mark Haefele, CIO of UBS Global Wealth Management, in a note to clients. With macroeconomic and policy uncertainty elevated, we expect markets to remain volatile in the months ahead.
The recent inflation report has also stoked some fears that the Federal Reserve may raise interest rates by a full percentage point next week.
While today’s headlines of high inflation, reactive markets, and a hawkish Fed may be daunting for short-term investors, they’ll soon be history for investors with a longer horizon. And amid such headwinds, long-term investors may want to include some actively managed ETFs in their portfolio.
“If you’re an investor with an investment horizon of three, five, or even ten years, be aware of what’s happening now, but don’t forget where you want to go,” said Neil E. Kays, senior product marketing manager at T. Rowe Price.
As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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