May 6, 2022 - Economy & Business

Charted: Volatility is the new normal

Data: FactSet; Chart: Baidi Wang/Axios

Thursday was another wild one for stocks, in a display of extreme volatility that's starting to look like a trend.

Why it matters: The treacherous swings in stock prices reflect the new — and deeply uncertain — phase of the post-pandemic era.

  • The chart above shows just how frequent outsized daily swings have become over the last three months.

What's new: The S&P 500 dove 3.6% Thursday — more than erasing its 3% gain on Wednesday — a giant two-day whipsaw for investors.

  • The pain was broadly spread. All 11 S&P sectors — subindexes that cover broad industry groups — fell.
  • Market giants like Amazon and Apple — down 7.6% and 5.6% — weren't spared.

State of play: Investors are getting hammered by three related cross-currents — inflation, monetary tightening and a China slowdown.

The bottom line: There are very few guides for markets to rely on when getting hit with a combination of shocks as big as we're seeing. With the S&P down 13% so far this year, investors are settling on one clear answer to a lot of their questions: sell.

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