A chart that puts market volatility into perspective

President Trump’s tariffs have put market volatility back in the spotlight.

After tariffs on nearly all trading partners were announced on April 2, the S&P 500 Index briefly descended into bear market territory — a rare sign of extreme economic pessimism when stocks fall by 20% or more from their peak. A 90-day pause on reciprocal tariffs declared on April 9 caused the index to skyrocket 9.5%, only to fall 3.5% the following day.

The damage spilled over to the U.S. Treasury market, which may explain why Trump paused some tariffs. The yield on the 10-year Treasury, a cornerstone of the global financial system, widened to 4.34% from 4.01% a few days prior — an indication of market turbulence.

While markets can be treacherous during periods of heightened volatility, they have often bounced back quickly. Indeed, stock market returns have typically been strongest after sharp declines. The average 12-month return immediately following a 15% or greater decline is 52%.

That’s why it’s often best to remain calm and stay invested.

Now is the time to put a long-term strategy in place to help you pursue your goals. Schedule your complimentary consultation today.

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Want to better understand how market swings like this could impact you? Read more from the Capital Group here.

Plus, your weekly market update.

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