Speaker of the House John Boehner, center, and National Security Adviser Susan Rice listen as President Obama delivers a statement on Syria during a Tuesday meeting with members of Congress.(Photo: Jim Watson, AFP/Getty Images)
Adam Shell, USA TODAY
NEW YORK - Not too long ago, stocks traded up or down based on the answer to one question: Will the Fed taper or not? Stocks rose when odds of the Fed cutting back on its market-friendly bond-buying program fell. Similarly, when tapering was viewed as a done deal, stocks fell.
Now stocks are moving on a different question: Will the U.S., as President Obama is lobbying for, strike Syria's government as punishment for allegedly gassing its own people?
Proof that the "will we or won't we strike Syria" question is responsible for recent stock volatility was on display last week, over the Labor Day weekend and in the first trading day of September. On Aug. 26, stocks were up until Secretary of State John Kerry laid out the U.S. stance on striking Syria. The Dow finished down 64 points and fell 170 points a day later as fears of a military strike intensified and pundits laid out the potential unintended consequences of a strike. By last Thursday, the Dow was inching back up amid news that Obama had not made a final decision on whether to strike.
Over the weekend, Obama said he would seek congressional authorization for a military strike, a move that appeared to reduce the odds and scope of U.S. action. Stock futures rose on the news. On Tuesday the Dow was up almost 125 points before House Speaker John Boehner, R-Ohio, said he backed Obama's plan. That news dragged the Dow down, causing it to finish 5 points lower. The bottom line: Short-term market moves will be driven by Syria news.