Market Soars: Four Days of FOMO Fuel Gains

The market recently experienced a four-day surge, characterized by widespread "fear of missing out" (FOMO) among investors. This rally was fueled by optimism surrounding a potential interest rate cut next month, leading to significant gains across major indices. The Nasdaq climbed 5%, the S&P 500 rose 4%, and the Dow increased by 3.66% over the four-day period.

The Russell 2000 small-cap index emerged as a standout performer, rallying nearly 8%. This broad-based advance suggests the market's upward momentum is not solely reliant on the AI trade, as sectors like consumer discretionary, materials, and healthcare also saw substantial increases. Even chip stocks, micro-caps, and biotech demonstrated strength, indicating a diverse participation in the market's rise.

Further reinforcing the positive sentiment, the VIX index, a key measure of market volatility, declined to a favorable level around 17. This downward trend in volatility, along with a similar decrease in bond market volatility, aligns with historical patterns leading into the end of the year, often associated with a "Santa Claus rally." Commodities, including silver, gold, and copper, also showed upward movement, with silver threatening to break out to new highs.