Stock market whiplashes as volatility dominates

Data: Yahoo Finance; Chart: Axios Visuals

Pendulum swings in the market this week reflect just how much investors are recalibrating. 

Why it matters: Volatility, absent last year, is back this year and here to stay. 

  • “Just like yesterday wasn’t the end of the volatility to the upside, today’s not the end of the volatility to the downside,” John Petrides, portfolio manager at Tocqueville, tells Axios.

State of play: Stocks saw their worst day of the year today, led by a sell-off in areas of the economy that boomed during the pandemic.

  • Big Tech — namely Apple — had a huge impact on the losses, as did Facebook parent company Meta, Amazon, Netflix, Google and Microsoft. 
  • Meanwhile e-commerce giants Etsy, EBay and Shopfiy spooked investors when they cautioned growth would be slowing.

By the numbers: The S&P 500 closed down 3.6% today while the tech-heavy NASDAQ closed down nearly 5%.

  • Yesterday, following the Fed’s expected half point hike, the S&P closed up 3% while the NASDAQ closed up 3.2%.  

The big picture: Supporting factors of last year’s stability, including the expectation that stay-at-home trends would continue, are gone now and so money is shifting around massively in response.

  • The era of cheap money is now over as well.

Yes, but: In many ways we have reverted to normal. And the stock market as a whole looks remarkably healthy, Axios’ Felix Salmon wrote today.

What to watch: The war in Ukraine “is the ultimate wildcard,” says Petrides.