S&P500 and Nasdaq 100: US Indices Swing Wildly in Oil-Driven Session

Stocks Churn as Trump’s Speech and Oil’s 8% Surge Keep Traders on Edge

The major U.S. stock indexes are edging lower shortly after the mid-session on Thursday. The theme of the session so far has been volatility with the markets making sharp swings tied to rising oil prices and fresh comments from President Trump on the Iran conflict. The stock market is also closed on Friday, which may be contributing to the whipsaw price action.

At around 17:39 GMT, the Dow Jones Industrial Average was down about 115 points, while the S&P 500 and Nasdaq Composite each hovered slightly below the flatline. The futures market was steady-to-better overnight, but saw steep losses as Trump delivered his speech Sunday night. The sell-off extended into Thursday’s opening before staging a partial rebound. I haven’t seen any significant damage to the current chart pattern, but the two-sided trade shows just how reactive the markets remain to geopolitical headlines.

Technical Outlook

Technically, the S&P 500 Index (SPX) is in a downtrend, but this week’s price action and resilience has brought it back inside a key pivot zone at 6483.01 to 6566.52. This also keeps it within striking distance of the 200-day moving average at 6644.55. As long as it stays near the 200-day MA there is a chance that the market could recover fast. But the farther it pulls away to the downside from this indicator, the worse the selling could get.

Hope and Threat in the Same Speech — Traders Don’t Know Where to Stand

As I wrote earlier, volatility is the theme today with the main driver renewed uncertainty around the U.S.-Iran conflict. Trump triggered the move Sunday night when he signaled that while progress toward ending the war is possible, military action could intensify in the coming weeks. It is that mix of optimism and threat that has left traders unsure of how to position themselves against risk. Without knowing the timing of Trump’s plans, investors don’t really know how to tighten their hedges so selling stock is the fastest and easiest way to mitigate the risk of a steep decline or even crash. Trump gave a 2 to 3 week window for the end of the war, but current negotiations mean it could actually end at any time.

Iran and Oman Working on a Hormuz Plan Sparked a Brief Rally

Specifically, the markets initially sold off hard, with the Dow down more than 600 points at its low. But sentiment briefly improved after reports that Iran and Oman are working on a plan to monitor ship traffic through the Strait of Hormuz. It was this update that helped stocks recover and even turn positive for a short time before sellers took control again.

Nobody Wants to Be Caught Long or Short Into the Long Weekend

Still with the long Easter holiday coming up traders don’t seem to want to be caught “too long” or “too short” ahead of the long weekend. The choppy back-and-forth price action also reflects a market reacting in real time to headlines, rather than trading on clear direction.

During this shortened week, stock traders have kept an eye on crude oil prices with $100 a barrel in both Brent and WTI acting as a crucial pivot price. A dip toward or under it brought out the buyers, decisively over it and the sellers regained control. Today, with oil jumping 8%, the sellers are in charge, except for the time when the intraday news created hope for a quick resolution.

It’s the Gap Between Hope and Reality Driving the Swings

Headlines, headlines, headlines. That is what’s making investor behavior so hard to read. Stocks bounced fast on any sign of progress then pulled back even faster when traders reassessed. The CBOE Volatility Index moved above 25. Fear and uncertainty are back. Investors want this war to end quickly but the price action says they don’t believe it’s happening anytime soon. In my opinion, it’s the gap between hope and reality that is driving the sharp intraday swings.

Heading Into a Long Weekend With No Clear Direction

Volatility isn’t going away into the close. Markets are shut Friday for Good Friday and nobody wants to carry risk into a long weekend with no clear direction on the war. Oil prices and geopolitical updates are still running the show. Expect quick reversals and limited conviction until something changes.

More Information in our Economic Calendar.