Stabilization in markets does not mean calm. It simply means investors are beginning to digest and analyze the news flow rather than just reacting to every headline. And that’s an important distinction for the S&P 500 Index (^SPX) here, writes Kenny Polcari, chief market strategist at SlateStone Wealth.
Today’s market is dominated by algos, Momo guys, and headline-driven flows – a result of posts on X, Reddit, and LinkedIn, as well as news stories that get updated all day long. That tends to cause the ‘smart logic algos’ (which is an oxymoron) to shoot first and ask questions later. That’s exactly what we saw again Tuesday.
(Editor’s Note: Kenny is speaking at the 2026 MoneyShow Masters Symposium Hollywood Florida, scheduled for April 9-11. Click HERE to register.)
S&P 500 Index (^SPX)
Data by YCharts
Early selling pressure gave way to bouts of buying as traders attempted to determine whether the recent surge in oil prices or the anxiety-provoking geopolitical headlines represent a temporary geopolitical spike or the beginning of a more-sustained inflation risk. For now, the market appears to be in the information-gathering mode.
As long as volatility remains elevated, markets are likely to stay skittish and prone to sharp intraday moves as participants react to every new headline coming across the tape. That said, long-term investors see these periods very differently. Elevated volatility tends to create opportunities – as strong companies get pulled lower (mispriced) along with the broader market.
As for the S&P, it recently closed at 6,556 – leaving it below the long-term trendline at 6,630 for the fourth straight day. I said that if we broke that trendline, it would likely set the market up to test the 6,500 level — and that’s exactly what happened on Monday when the index traded down to 6,480.
That move represented about a 7.5% pullback from the January highs — and once again, that is still well within the boundaries of normal market trading. Corrections like this happen all the time.
