What You Need to Know
- Thursday was only the fourth day in 20 years when stocks and bonds each posted 2%-plus declines, going by the ETFs that track them.
- Investors, conditioned to the success of dip buying for most of the past decade, are spooked by the new experience, exiting equity-focused funds in April at one of the fastest paces in years.
A common warning on Wall Street for a decade is that trading desks have been overrun by people who are too young to know what it’s like to navigate a Federal Reserve tightening cycle. They’re finding out now.
In markets, there’s turbulence, then there’s whatever you call the last two days, when a 900-point Dow rally was followed 12 hours later by a 1,000-point decline. Hundreds of billions of dollars of value are conjured and incinerated across assets in the space of a day lately, a stark reversal from the straight-up trajectory of the post-pandemic era.
Where once every dip was bought, now every bounce is sold.
Thursday was only the fourth day in 20 years in which stocks and bonds each posted 2%-plus declines, going by major exchange-traded funds that track them. Concerted cross-asset stress of that magnitude reliably spurs speculation that big funds are being forced to sell.
“I’m scared like everybody else,” said Jim Paulsen, chief investment strategist at Leuthold Group and one of Wall Street’s most visible bulls. “I’ve been in the business almost 40 years now– these things don’t get any easier, because you never know for sure and you also know you’ve been wrong in the past.”

‘Are We Done Yet?’
“Clients are calling and saying, ‘So are we done yet? Should we be concerned? Should we put it all under the mattress?’” Paul Nolte, portfolio manager at Kingsview Investment Management, said by phone from Chicago. “This feels a little bit more like 2000, 2002, where it’s just a steady persistent decline punctuated by some rallies.”
Fed disruption is everywhere. On Wednesday, after Chair Jerome Powell signaled that a rate increase of 75 basis points is off the table for coming meetings, stocks rallied, sending the S&P 500 to the biggest post-Fed gain in a decade.
Then the market buckled Thursday, with the index falling more than 3.5% as traders reassessed the landscape.
Over the past 25 years, only three other Fed policy meetings have seen big market reversals of this size to the downside over the first two days.