Stock market making you seasick? Here's why trading feels so choppy

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Through Friday, the S&P 500 had finished with a daily gain or loss of more than 2% 12 times so far in 2022. That’s compared with just 7 up or down moves of that magnitude in all of 2021.

Feeling a little seasick? It’s not just you. Besides turning in a historically ugly performance over the first four months of 2022, stocks have been uncommonly choppy.

With the exception of 2020, when pandemic-induced volatility produced 44 such days, the S&P 500 has already topped or is on track to exceed totals for 2%-or-greater moves for every year stretching back to 2011 . Look no further than the market reactions to results last week from Facebook parent Meta Platforms Inc. FB, +5.32% and Amazon.com Inc. AMZN, +0.18%.

And then, of course, there’s the Federal Reserve and its plans to rein in inflation running at its hottest in more than four decades. That was on display over the past week as the the Japanese yen USDJPY, +0.03% collapsed to a 20-year low versus the dollar and the euro EURUSD, -0.11% edged closer to parity with the greenback. The Bank of Japan surprised investors by not budging from its ultra-easy monetary policy, in contrast to a Fed set to deliver its most aggressive tightening cycle in decades.

The Cboe Volatility Index VIX, -3.17%, a measure of expected 30-day S&P 500 volatiity, rose 18% over the past week to 33.40 on Friday, above its long-run average below 20. It edged up further to around 34 on Monday.

 

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