WALL Street hit the panic button last week and survived. But the shocks have left investors stranded.

Following its worst week in almost three years, the S&P 500 has fallen into correction territory and year-end forecasts are being lowered. Safe havens like gold and the Swiss franc rallied.

Economic growth has slowed and budget-cutting legislation recently passed in the US Congress could further dampen economic activity. That leaves the path uncertain. So what are investors to expect in weeks ahead?

“In a word, volatility,” Citigroup strategist Jamie Searle said.

The CBOE Volatility Index, the market’s gauge of anxiety, had its largest daily percentage spike since early 2007 on Thursday. Another source of worry was thrown into the mix late Friday, when Standard & Poor’s stripped the US of its top-notch “triple-A” credit rating. In its report, S&P was pessimistic US lawmakers could reach the consensus needed to rein in deficits that were responsible for the ratings cut.

“The long-term implications are daunting,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. “Short-term, Treasuries remain a premier safe-haven refuge.”

Having fallen in nine of the last 10 sessions, the S&P 500 closed the week down 7.2 per cent – its biggest percentage drop since the third week of November 2008. Selling was broad as average daily volume for the week soared to 11.6bn shares traded on NYSE, NYSE Amex and Nasdaq. That represents about a 55 per cent jump from what was until last week the yearly average of nearly 7.5bn.