There have been few weeks on Wall Street such as this one. The major averages fell sharply on Thursday as the S & P 500 dropped 3.5%, while the Dow Jones Industrial Average plunged 1,014.79, or 2.5%. The Nasdaq Composite slid 4.3%. The moves came after the White House clarified to CNBC that the 125% U.S. tariffs on Chinese imports were in addition to another 20% levy already in place, bringing the effective duty rate to 145%. That clawed back a lot of what was the S & P 500’s third-biggest rally post-WWII on Wednesday, when the benchmark surged nearly 10%. Just look at the Dow’s daily performance since Trump rolled out the tariffs (and then later walked some back): This isn’t normal market behavior and that’s hurting overall confidence, traders said. “It all feels like typical bear market behavior– 98% up volume [Wednesday], 85% down volume [Thursday],” wrote Wolfe Research strategist Rob Ginsberg. Indeed, similar market swings have taken place during bear runs. The S & P 500’s two biggest daily declines of the past 20 years occurred in March 2020, as the Covid-19 pandemic forced a shutdown of the global economy. Other major declines took place during the great financial crisis. Some of the biggest S & P 500 gains over the past 20 years have also happened around major market downturns. The S & P 500 jumped over 9% multiple times in March 2020. It saw big gains during the Great Financial Crisis before finding bottom. “The key is to not get emotional at the extremes,” BTIG chief market technician Jonathan Krinsky wrote. “We sensed wild optimism yesterday into the close, and immense fear again at today’s lows. This is not a time to chase price, it’s a time to fade extremes, in our view. If we are bottoming, we don’t expect it to be a ‘v-shaped’ bottom. If it’s not a bottom (i.e. bear market has more to go), we think there will be time before the next meaningful leg lower.” Elsewhere Friday morning on Wall Street, American Express got an upgrade to buy at Bank of America, which noted the stock could be resilient in an economic downturn. “Spending is slowing but we believe higher income consumers, who comprise Amex’s customer base, will prove to be more resilient from a credit and spending perspective,” the bank said. “BAC aggregated credit and debit card data shows higher-income households have largely had higher card spending growth than middle- or lower-income peers for more than a year.” Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
