As such, this is one of the most followed indices in the world. Investors use it to measure the performance of the global economy. This is because most of the companies in the index derive most of their revenues from countries outside the United States.
This year, the investing world has had to come to terms with the increasing global risks including on trade and on inflation. This has, in turn, led to a surge in volatility which has led to investors being more cautious.
Last week, the index fell to a multi-weekly low of $2586 after Trump initiated new tariffs on China. Yesterday, it surged after reports emerged that the two countries were engaged in high-level negotiations.
At this time, traders can buy the dips. However, they need to be extra cautious because of the increasing risks.