The Stock Market Hopes the Worst Is Over. Experience Says It’s Not.

Never underestimate the stock market’s ability to prioritize hope over experience.

Hope would suggest that everything will work out fine: The banking panic that began with Silicon Valley Bank’s collapse is just a blip; the Federal Reserve’s quarter-point interest-rate hike, despite the turmoil in the financial system, is sound monetary policy; and the

S&P 500 index

bounce that began in October really was the start of a new bull market. That the index rose 1.4% this past week, while the

Cboe Volatility Index

better known as the VIX, fell 15%, would suggest the problems are manageable.