Like a good thriller, you can't be sure where the stock market is headed these days until the very end.
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The market has become so volatile that big swings are happening not only day to day but hour to hour as investors react to a mix of hard news, fear and speculation.
Take Wednesday, for example. What seemed like a terrible day for stocks ended up being quite a good one after the Dow Jones industrial average swung from a 500 point loss to a 230 point gain. The opposite has occurred in recent weeks, too, with early rallies turning into routs after stocks plunged in the last hour or so of trading.
The turnaround from last year's procession of gradual, effortless gains has been dizzying. Traders pin much of the blame on Washington, D.C., where the Trump administration has stirred up worries about a possible trade war and the Federal Reserve has embarked on a course of interest rate increases. But they also see the rise in market volatility since February as the pendulum swinging back to normal, and perhaps overshooting it, following an unusually calm 2017.
"On those days where we saw the headlines of the Dow down 600 points, 700 points, 800 points, and the velocity of it where people hadn't finished processing the initial headline that we're already down 100 points, that felt a lot like the crisis days" of 2008 when the financial system seemed to be collapsing, said Justin Wiggs, senior equities trader at Stifel.
"But overall, there still hasn't been that sense of panic. Maybe that's because given the gains of the broader market, people are almost playing with house money," he said.
There may not be panic, but there certainly has been a sense of whiplash.
For all of last year, the S&P 500 had eight days where it finished with a gain or loss of 1 percent, a traditional marker for a "big" move in stocks. Already this year it's had 26. At that pace, the index would end the year with about 100 such days. Over the last 50 years, the index has typically had only half that number of days with big moves.
The intraday trading movements have been even wilder. On Wednesday, the S&P 500 was down 1.6 percent minutes after trading started, as investors worried about tit-for-tat tariffs announced by the United States and China. But the index was break-even by midday and then ended with a 1.2 percent gain. Such daily swings from high to low have been commonplace since volatility returned to the market and wider than historic norms.
Since early February, the S&P 500 has moved 1.7 percentage points from its low to its high on the typical day. That's more than triple last year's median of just 0.5 percentage points. Over the prior 30 years, the median has been 1 percentage point. That means half the days over that span had a swing of less than 1 percentage point, and half had a bigger move.
The choppiness has been particularly acute in the last hours of trading when, according to an old market adage, the action is driven by the "smart money," such as big institutional investors. The early-morning hours, meanwhile, are supposedly dominated by mom-and-pop investors trading on their gut instincts and reactions to the news that occurred overnight.
The worst half-hour of the trading day has been from 3 p.m. Eastern time to 3:30 p.m., when the market is approaching its 4 p.m. close. Since the stock market started its run of volatility on Feb. 2, the S&P 500 has lost an average of 0.15 percent during that half hour. That's twice as big as the next-largest drop, from 1 p.m. to 1:30 p.m.
The quick moves can make things dicey for investors trying to time their trades. Anyone who sold an S&P 500 ETF Wednesday morning at the low point locked in a loss of 1.6 percent for the day, for example. But investors selling S&P 500 index mutual funds had to wait until after the day ended, because traditional mutual funds trade only once each day. They would have ended up with a gain for the day, even if they put in their sell order at the same time as the S&P 500 ETF investor.
For now, investors seem to be stomaching the increased volatility just fine. At Brouwer & Janachowski, an advisory firm that manages $1.4 billion, CEO Stephen Janachowski said he has received surprisingly few calls from panicked clients since market volatility surged higher in February.
"People will take this in stride because they've been making money for nine years," he said. For instance, a $10,000 investment in a S&P 500 index fund after the stock market bottomed in March 2009 has grown to more than $45,000.
"Everyone knows what goes on in Washington can flip-flop on a day-to-day basis. I think people have gotten used to the volatility more so than the market has."