Stock Market’s Calm Belies Extreme Swings in Individual Shares

(Bloomberg) -- The consciousness of calm that has pervaded the US banal marketplace for months is masking unprecedented bursts of volatility successful idiosyncratic shares, accidental Barclays Plc strategists.

Last twelvemonth was a lawsuit successful point, erstwhile immoderate of the biggest components successful the S&P 500 Index saw abnormal swings arsenic the gauge registered an AI-led, 16% rally. Between the 100 largest scale members, determination were 47 instances of crisp selloffs — specifically, a driblet of 5 modular deviations oregon more, a determination truthful uncommon it’s often considered an anomaly, according to Barclays. That’s the astir successful the bank’s information going backmost to 1998.

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More of the aforesaid is astir apt up this year, Barclays says, successful a telephone that underscores successful portion however babelike the benchmark gauge has go connected the trajectory of shares related to the artificial-intelligence theme. But according to Barclays, it besides shows however AI itself has sped up however traders process market-moving events.

“Single stocks person go wherever the halfway of gravity of volatility is,” Stefano Pascale, caput of US equity derivatives probe astatine Barclays, said successful a telephone interview. That situation has created a “lottery-ticket mentality” among retail traders, helium said.

On Wednesday, arsenic the S&P 500 fell 0.5% and investors sold tech shares, a intimately watched measurement of volatility for the gauge held beneath its mean for 2025. Barclays probe points to buying from retail investors connected declines successful stocks arsenic 1 origin suppressing marketplace swings. The benchmark gauge was up 0.5% astatine 10:03 a.m. successful New York connected Thursday.

The adjacent period oregon truthful brings a slew of events that hazard delivering a jolt to the S&P 500, which acceptable a grounds precocious connected Monday. For investors looking to hedge against renewed volatility successful the index, Susquehanna International Group strategist Christopher Jacobson recommended buying puts connected the SPDR S&P 500 ETF Trust (SPY), with a onslaught terms of $685, compared with its Wednesday adjacent astir $690.

Specifically, helium cited successful a Wednesday enactment a declaration expiring Feb. 6. He said that would springiness extortion done the bulk of large-cap tech earnings, the Federal Reserve’s Jan. 28 argumentation decision, the Feb. 6 jobs study and a imaginable Supreme Court ruling connected tariffs, not to notation a increasing paper of worries astir planetary affairs.