Good morning,
Week by week, volatility has been edging higher. We’re seeing more frequent 1–2% swings in both directions across the major indices — a noticeable change from the steadier tone that characterized much of last year.
Yesterday, U.S. equities tumbled as the tech-led selloff deepened. The S&P 500 fell -1.6%, while the Nasdaq and Russell 2000 each declined roughly 2%. Just a few weeks ago, it took three sessions to produce a 3% pullback — this week, we moved more than halfway there in a single day.
Elsewhere, Treasuries caught a defensive bid with yields falling across the curve. The U.S. dollar was little changed against major peers, while gold and silver — recent leadership areas — saw sharp declines.
This morning’s January CPI report delivered modestly favorable news — roughly a tenth of a percent softer than expected. At least initially, markets appear to be treating the data as a green light for rate cuts later this year under the new Fed leadership. Some might say that feels like an aggressive interpretation of a relatively incremental data point – I would say over-reaction.
Importantly, the internal message from the market remains constructive. We are not seeing the typical warning signs that accompany a market top — at least not yet. For now, this appears to be volatility within an ongoing trend rather than a shift in regime.
Be well,
Mike
Robertson Stephens paid no fee to obtain recognition but has paid licensing fees to reference its appearances on the Newsweek, USA Today, and FA Magazine rankings lists. See Awards Disclosures
