On Monday morning, the U.S. stock market plunged into wild volatility. Major indexes plunged dramatically as fears over new tariffs and the overall economic picture grew. The Dow Jones Industrial Average fell 349 points or 0.9%. At one point in the session on Friday, it had tanked by as much as 4.7%. During the same week, the S&P 500 was down 0.2% and clipped into bear market territory intraday. This swing in the markets is indicative of an increasing uncertainty amongst investors about government policy, economic direction and looming recession.
The Dow Jones Industrial Average showed extreme whipsawing throughout the day. It can hardly be blamed though, when it swung a mind-boggling 2,595 points from its nadir to zenith. Such all-encompassing moves highlight just how jittery the market is right now as traders respond to every bit of new news and data that breaks. Indeed, in just the last three trading sessions, the S&P 500 has fallen over 10%. This historic drop has people worried about an impending bear market.
The yield on the benchmark 10-year Treasury has recently jumped past the 4% threshold. This surge in turn exacerbates concerns of increasing interest rates and their effect on the economy. The CBOE Volatility Index, called Wall Street’s fear gauge, exploded to over 60. This unprecedented surge marks a new level of panic among investors.
Even as the dust from these events settled, the White House turned back speculation that there might be a 90-day tariff reprieve coming, calling it “fake news.” Unfortunately, this declaration has only added to the uncertainty for trade policies and their economic repercussions. Louis Navellier, a market analyst, commented on the current situation, stating:
“It appears that the storm is easing, perhaps helped by the fake story of the easing of the tariffs.” – Louis Navellier
Navellier also discussed the impact of rising Treasury yields, suggesting that fears of a recession may have been overstated:
“The rising Treasury yields are a strong indication that recession fears had become overblown, and perhaps the expectation that the Fed will not be making any emergency cuts. It also may be that Trump’s strategy will not turn out to be as destructive as the bears insist they are.” – Louis Navellier
In corporate development, health insurers had a tidal wave of bullish activity. The Trump administration has announced its intent to raise payment rates to private insurers in Medicare next year by 5.06% — far higher than the Biden administration’s prior plan of a mere 2.23%. Humana’s stock jumped more than 13% on the news. At the same time, shares of CVS Health surged more than 7%, and UnitedHealth soared as much as 6%.
Last week, Levi Strauss had an impressive earnings beat, posting adjusted earnings of 38 cents a share. This represents an outstanding 52% jump from last year. The company’s net revenue for the quarter was $1.53 billion, an increase of 3% over last year. That strong performance from these companies is a bright spot and gives some optimism in the context of deeper market volatility.
Read on as traders are carefully finding their way through this choppy environment. In other small business news, the National Federation of Independent Business will soon be putting out its small business index reading for March. This new report would be a good place to look if you wanted to learn more about the health of small businesses in today’s uncertain economy.
On Monday, traders had their largest day ever—cumulatively across all traders. They traded more than 29 billion shares back and forth, the most activity in at least 18 years. This unique activity is the result of urgency and concern among investors as they continue to look for clarity and reassurance amid an uncertain and often unpredictable market environment.