"It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what's happening today", said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group.
Late Friday, there was a report that President Donald Trump was discussing the possibility of firing Federal Reserve Chair Jerome Powell, a move that could undermine confidence in the USA financial system. "The "Bear Grip" is feeding on itself as Trump continues to spread uneasiness", said Cardillo.
Back in Asia, Chinese markets slid after the release of weak economic data, showing that profits in the industrial sector declined 1.8 per cent in November.
After Monday's Wall Street losses, Asian markets followed. The put call ratio - a measure for downside protection against a stock market decline - reached the highest level since at least 2003 Thursday, pointed out SunTrust Chief Markets Strategist Keith Lerner. The Nasdaq Composite is now 22 percent below its record reached in August and is in a bear market.
All three major indexes were on pace to snap a four-day losing streak. Adobe rose 6.1 percent to $217.71. Even with Wednesday's big gains, the Dow, S&P 500 and Nasdaq are all down more than 12 percent for the month.
With the country's largest technology stocks in the likes of Amazon and Apple losing three to seven percent on the day, all of the major stock indexes in the USA are expected to struggle until the year's end. Against a basket of currencies it was down 0.3 per cent. Crude surged more than 6%.
The near-decade long bull market that began in March 2009 earned a reprieve on Wednesday's rally.
The stock market was only open for half a day Monday, and that was more than enough time for the Dow Jones Industrial Average to drop 2.9 percent to 21,792.20. "We have companies, the greatest in the world, and they're doing really well". "They have record kinds of numbers". A correction is generally defined as a 20 percent retreat off recent highs. Small caps joined the rally with a 5 percent advance. Just two days ago President Donald Trump described the Fed as the "only problem our economy has" as the central bank raises interest rates. Exchanges throughout Europe were closed for the day-after-Christmas holiday.
"We have started to see the yen regain its place as the safe haven of choice", MUFG's Hardman said. Though appointed by Trump, the Fed is not beholden to the White House and has slowly raised interest rates, to the president's consternation. He said that call, meant to assure, may have induced panic in the markets. "So while there is a minority view that stocks would rally if Powell were to be replaced, I believe it would cause a serious sell-off because of what it represents".
Trump has also reportedly been upset over the last week with his treasury secretary, Steven Mnuchin, who advised him to appoint Powell to the Fed job.