Another day, another red day for stocks and commodities worldwide. The S&P 500 index broke through the lows set in October 2014 and at an intra-day nadir traded at a level unseen since April of that year.

Oil continues to lead the way down. The International Energy Agency (IEA) issued a bearish monthly report that helped to drive prices further down. The international agency opined that unless something changes, global oil supply could exceed demand by 1.5 million barrels per day (bpd) and prices could go lower.

The IEA sees non-OPEC production falling by 600,000 bpd (led by a drop from the U.S.)—a forecast largely echoed by OPEC, which predicts a 660,000 bpd fall—but on the downside, the agency also thinks that Iran could add 300,000 bpd to the global supply by the end of March 2016.

Iran claims that it can boost production by 500,000 bpd by yearend. However, due to Iran’s lacking infrastructure, most analysts doubt that it can meet that target in such a short time. Nevertheless, the West has lifted sanctions against the country, and more oil will flow into international markets.

The other key variable, China, released economic data this week that shows the country isn’t in as bad a shape as many fear.

In the fourth quarter, China’s GDP increased by 6.8 percent on a year-over-year basis. In 2015 overall, its economy grew by 6.9 percent, slightly below its official 7 percent target—not the drastic slowdown expected by some. December retail sales (11.1 percent gain) and industrial production (5.9 percent) figures were both also a bit below expectations but better than the dire scenarios the negative China-related headlines would lead one to believe.

Markets responded positively to the China news earlier in the week, but the bounce was short-lived as pessimism over oil turned global equities red. Despite the sharp decline, we still view this as more likely a fear-based correction than the start of a fundamental breakdown. If there is a silver lining to the terrible start to the year, the U.S. Federal Reserve, which will hold the first 2016 policy-setting meeting next week, will likely be forced to take a dovish stance to avoid further unnerving financial markets worldwide. Something else to keep in mind: the Russell 2000 Index, comprising of mid- and small-cap stocks (as a group they tend to offer higher growth but higher risk), was up 0.4 percent today and greatly outperformed its blue-chip counterparts. This could be a sign that risk appetite may be returning to the market. Time will tell.