Kelly S. from Bismarck, ND asks: Hello Mitch, I’m writing to ask you about the market volatility over the past few weeks. It feels like every day the market is either up a lot or down a lot, and it’s hard to make heads or tails of whether things are improving or maybe getting worse before they get better. What’s your perspective? Thank you!
Mitch’s Response:
Thank you for writing. I very much understand what you’re asking, in large part because you are objectively correct—April 2025 was the most volatile month for the S&P 500 since the pandemic crash in 2020. At one point late in the month, the S&P 500 had gained or lost 1% in 9 of 12 trading sessions, underscoring your point of wild swings in both directions.1
The CBOE Volatility Index, known as the VIX, illustrates the recent spike:
As I’ve recently written in my Mitch on the Markets column, we’re currently in an event-driven market, meaning that news stories, policy changes, or even rumors of policy changes can have an immediate impact on share prices. In my view, one of the biggest mistakes an investor can make in this environment is to overreact or anchor your sentiment to a particular story—whether in a positive or negative direction.
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Put another way, a news story could emerge tomorrow that all tariffs are canceled, and the administration is shifting focus to tax cuts and deregulation. Or, a news story could emerge that reciprocal tariffs are back on, and that China and the U.S. are escalating their trade battle even further. Or perhaps something in between, like incremental progress towards trade deals with a handful of countries and tenuous negotiations with others.
Just last week, for instance, we saw a relief rally in the S&P 500 purportedly tied to a story about President Trump not taking steps to fire Federal Reserve Chairman Jerome Powell. There were also mutterings about trade talks with China that the U.S. confirmed but China denies. Other rumors pointed to the U.S. potentially lowering tariffs on Chinese imports by up to half from current levels. The stories on this issue will likely continue every day.
In short, there is no way to know what tomorrow’s news cycle will bring, which makes investment decisions based on positive or negative surprises futile, in my view.
At some point, however—and probably when the news cycle is still very negative—the market will sustain a rally that either continues the current bull market or starts a new one if a bear market happens in the near term. My sense is that we’ll see this breakthrough sooner than later because current market turbulence is not being caused by an external shock—it’s about policy that can be changed at a moment’s notice.
Going forward from here, I expect market volatility to persist. After all, there are still 10% twists and turns are likely, which means more ups and downs are likely in the near term. Longer-term, however, it underscores even more why a disciplined, diversified approach is the most effective way to navigate your way through it.
As market volatility continues, it’s crucial to be prepared. I’m offering exclusive access to our comprehensive guide, The Do’s and Don’ts of Stock Market Volatility4. Drawing from 30 years of expert insights, this resource is designed to help you navigate turbulent markets with confidence. Inside, you’ll find:
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Disclosure
2 Fred Economic Data. April 29, 2025. https://fred.stlouisfed.org/series/VIXCLS#
3 Zacks Investment Management reserves the right to amend the terms or rescind our free The Do’s and Don’ts of Stock Market Volatility offer at any time and for any reason at its discretion.
4 Zacks Investment Management reserves the right to amend the terms or rescind our free The Do’s and Don’ts of Stock Market Volatility offer at any time and for any reason at its discretion.
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