The

S&P 500

has dropped so much that even this week’s upswing doesn’t mean the stock market is out of the woods.

The index dropped more than 1% Friday to a level well below 3636, and is down more than 16% from the peak of a summer rally. Previously, that level had been “support,” one where enough buyers had come in to send it higher in mid-June and even a few times in September. The buyers weren’t there this time around, and many may have turned into sellers once they lost confidence in the market’s ability to hold that level. These dynamics signal waning optimism in the stock market’s outlook, as markets are still trying to figure out how much economic damage will result from higher interest rates driven by the Federal Reserve, which is trying to reduce high inflation.