Market weathers volatility storm

How do you get the best week for the US stock market in a year and a half when the S&P 500 (SPX) loses ground three out of five days—and when the losses on one of those days exceeds 3%? It’s easy, when the up day is one of the biggest of the past seven decades.

That was the story last week, as the SPX rallied 9.5% on Wednesday after the White House’s 90-day tariff pause. Before the announcement, the SPX twice dipped into bear-market territory (20% below its February record high) on an intraday basis, and came close to triggering a -7% “circuit-breaker” trading halt on Thursday. But the index still recouped more than half of the prior week’s sell-off:

The headline: Stocks climb on tariff delay.

The fine print: Last week’s cooler-than-expected inflation readings from the Consumer Price Index (CPI) and Producer Price Index (PPI) essentially came and went without the markets appearing to take much notice. But as Morgan Stanley Wealth Management Chief Economic Strategist Ellen Zentner noted, the data arguably represented “old news, with tariffs expected to send inflation rocketing higher in the next couple of months. The Fed remains in a tough spot, caught between a trade war causing tight financial conditions and weight on the economy as inflation takes off.”¹

The number: 2, the number of times the SPX has rallied more in a day than it did last Wednesday.²

The scorecard: The major indexes were green across the board, but the Nasdaq 100 (NDX) tech index gained the most:

Sector returns: The strongest S&P 500 sectors last week were information technology (+9.4%), industrials (+6.7%), and communication services (+6.2%). The weakest sectors were energy (-0.3%), real estate (-0.2%), and health care (+1.1%).

Yields: Bonds retreated last week as yields jumped. The benchmark 10-year Treasury yield posted its biggest weekly range since March 2020, ending the week 0.46% higher at 4.47%.

Futures: May WTI crude oil (CLK5) tumbled as low as $55.12 last Wednesday, but rebounded to end the week down only $0.49 at $61.50. After starting last week by falling to its lowest level in nearly a month, June gold (GCM5) reversed to close Friday at a new record high of $3,244.60, up $209.20 for the week. Biggest gainers: May orange juice (OJK5) +23.1%, May silver (SIK5) +10%. Biggest decliners: April ether (ETHJ5) -13.4%, May natural gas (NGK5) -7.8%.

This week’s numbers include:

●Monday: NY Fed consumer inflation expectations
●Tuesday: Import Price Index, Empire State Manufacturing Index
●Wednesday: retail sales, industrial production, capacity utilization, business inventories, NAHB Housing Market Index
●Thursday: housing starts and building permits, Philadelphia Fed Manufacturing Survey
●Friday: markets closed (Good Friday)

●Monday: Goldman Sachs (GS)
●Tuesday: Bank Of America (BAC), Citigroup (C), Johnson & Johnson (JNJ), J.B. Hunt (JBHT), United Airlines (UAL)
●Wednesday: Abbott Labs (ABT), ASML (ASML), US Bancorp (USB), Alcoa (AA), Kinder Morgan (KMI)
●Thursday: American Express (AXP), D.R. Horton (DHI), Fifth Third Bancorp (FITB), Keycorp (KEY), Taiwan Semiconductor (TSM), UnitedHealth (UNH), Netflix (NFLX)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Traders and investors have heard plenty of references to 2020 over the past couple of weeks, with both the stock and bond markets making moves that haven’t been equaled since the COVID sell-off.

That includes the Cboe Volatility Index (VIX), which closed at its highest level (52.33) since April 2020 last Wednesday (April 8)—the same day the SPX set its lowest close (so far) of the tariff sell-off. The following chart compares the VIX during the stock market’s 2020 sell-off (left) to its recent performance (right):

The 2020 episode highlights a development that traders may be watching for in the event the market turns lower again and the SPX closes below its April 8 close.

While a lower SPX low would, typically, be accompanied by a higher VIX high—reflecting increased concerns about volatility as the market continues to sell off—that doesn’t always happen. In 2020, when the SPX closed 6.2% below its March 16 close on March 23, the VIX closed well below its March 16 close, suggesting the options market expected less volatility even though the SPX had fallen significantly between the two dates. March 23 turned out to be the low of the COVID sell-off.

The implication: Lower market anxiety expressed in a lower VIX—despite a still-falling SPX—can sometimes signal sentiment shifts and potential market turning points.

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¹ CNN.com. US inflation cooled to a six-month low in March, but tariff pressures are quickly mounting. 4/10/25.
² Since 1957, the year the S&P 500 expanded to 500 stocks.