Since the release of the jobs report, Wall Street has seen tremendous volatility amidst positive economic news for Main Street such as low unemployment, higher wages, and economic prosperity. Since the Great Recession, Wall Street has witnessed an economy with decent growth and peculiarly low inflation, and a strong market over the past year. The market's current reactions appear to speak to the market's expectation about the Fed's intention to raise interest rates and the potential for inflation.
Despite recent stock sell-offs and ensuing distress, the Dow continues to remain almost 40% higher since the presidential election. Strong corporate profits, economic growth, and tax cuts seem to have spurred the strong performance. As noted in prior posts, the market is not the economy and the economy is not the market.