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Recent market volatility is a function of President Donald Trump’s tariff talks and the uncertainty surrounding monetary policy.
The stock market’s bull run that began in October 2022 continues in 2025, albeit not without volatility. Retailers' outlook has turned mixed as the market swings to the ongoing uncertainties.
The recovery in late 2022 was due to a slowdown in inflationary pressure following the Federal Reserve’s interest rate hike, which began in March 2022.
The buoyancy extended through 2023, with the rally fueled by optimism concerning artificial intelligence technology. The hope that the Federal Reserve would reverse its policy stance was the catalyst that kept the rally going in 2024.
The stock market persisted with its uptrend at the start of 2025 as it weathered the weakness set in motion by the Chinese AI startup DeepSeek’s launch of cheaper large-language models.
The broader S&P 500 Index hit an all-time intraday high of 6,147.43 on Feb. 19 and a closing high of 6,144.15 on the same day.
Since then, the market has been experiencing volatility as investors expressed concerns about President Donald Trump’s tariff talks and the uncertainty surrounding the monetary policy amid fears that tariffs will fan inflationary pressure.
In 2025, the index bottomed at 5,504.65 on March 13, marking a peak-trough decline of 10.5%, suggesting the market entered correction territory.
After a back-and-forth movement in the subsequent sessions, the S&P 500 rallied on March 19, when the central bank announced a rate decision that aligned with expectations. The Fed also downgraded its growth forecast while nudging up inflation estimates.
The market has been higher for three straight sessions now, as Trump signaled that he may ease up on the tariffs.
The CBOE Volatility Index (VIX) spiked mid-March but has eased since then.
A Stocktwits poll asking users how volatility has impacted their trading received nearly 3,000 responses.
Thirty-two percent of respondents said the volatility hasn’t impacted their trading.
One-fourth said they traded in smaller, more manageable pieces. Almost a similar proportion (24%) said they traded less due to less liquid tape—a market where it’s difficult to buy or sell shares without significantly impacting the price due to low trading volume or fewer participants.
Nineteen percent said they waited for a more reasonable price.
The respondents' comments showed that they were willing to embrace volatility. One user said the more volatility, the better.
Another respondent said they have been buying the dips of Altimmune, Inc. (ALT) and Advanced Micro Devices, Inc. (AMD).
The SPDR S&P 500 ETF Trust (SPY), an exchange-traded fund that tracks the S&P 500 Index, edged lower early Wednesday. The SPY ETF is down 1.5% this year.
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