Understanding Market Volatility and Opportunities Amidst Change

Editor’s note: “How to Build Wealth in a Volatile Stock Market” was previously published in March 2025 with the title, “Beyond the Ups and Downs: Building Wealth in a Volatile Stock Market.” It has since been updated to include the most relevant information available.

The Stock market has experienced significant fluctuations since Donald Trump was inaugurated as the 47^th President of the United States.

Initially, stocks showed stability for about a month. However, this period of calm ended abruptly.

With the threat of substantial tariffs on the horizon, investors feared a potential global trade war and began to sell aggressively. The S&P 500 experienced a 10% decline over just 20 days, from mid-February to mid-March.

On April 2, following the implementation of the “Liberation Day” tariffs, Trump indeed initiated a global trade war. This decision led to a 10% market crash in two days, marking one of the fifth-worst two-day declines ever.

However, the swift market downturn did not last long.

A week later, when Trump announced a 90-day pause on tariffs, the S&P rebounded with a 9.5% increase in just one day. Following this, stocks experienced a remarkable 13% rally in 17 days, which included the market’s best nine-day winning streak in a century.

Stock market performance since Trump’s inauguration in early 2025; the ups and downs of stocks in the S&P 500″ class=”aligncenter wp-image-3288403″ />

The current market volatility is arguably unprecedented. With Trump’s strategic changes, investors are left pondering:

Is this heightened volatility the new norm for Wall Street?

Continuing Uncertainty: Expect More Market Fluctuations

While I believe that stocks will rise in the coming years, the path is likely to be rocky.

We appear to be in the midst of an AI Boom, which typically lasts for five to six years or longer. For instance, the Dot Com Boom spanned from 1995 to 1999, leading to a growth of about 582% in the Nasdaq Composite and nearly tripling the S&P.

This current AI Boom commenced in 2023. I anticipate another two to three years of substantial growth in AI stocks, which should elevate the overall market.

However, this journey will not be smooth.

Trump’s intentions to renegotiate trade agreements, rethink military presence, cut federal spending, and revamp tax policies suggest extensive changes ahead.

Clearly, significant transformations are on the horizon.

Without debating the merits of these changes, one fact remains: change brings uncertainty, which can unsettle investors.

This uncertainty could still lead to long-term growth, but it simultaneously assures continued volatility, mirroring the patterns of recent months.

Analyzing Market Volatility: A Look at Recent Trends

Since Trump’s inauguration earlier this year, the market has witnessed:

• One of the fastest 10% declines
  • After the announcement of the “Liberation Day” tariffs on April 2, the S&P dropped over 12.1% in just four sessions.
• One of the worst two-day crashes
  • This occurred on April 3-4, where the market faced a 10.5% decline, the fourth-worst two-day decline since 1950.
• One of the best single-day rallies
  • Following Trump’s announcement of a 90-day pause on tariffs, the S&P surged 9.5% on April 9, marking its strongest one-day performance since October 2008.
• One of the longest winning streaks
  • On May 2, the S&P achieved its ninth consecutive day of gains, the longest winning streak in over 20 years, rising roughly 10% during this timeframe.
• One of the highest readings for the volatility index
  • The CBOE Volatility Index (VIX), a measure of market volatility, nearly doubled in six months, reaching 27.86.

This three-month period has set numerous records.

If you expect a reduction in volatility over the next 45 months, you may be mistaken.

Strategies for Thriving in Today’s Market

Trump’s intent to implement sweeping changes signifies that the volatility witnessed is likely to continue throughout his term.

While this might be unsettling for buy-and-hold investors, adapting your strategy is essential.

The current market conditions offer unique opportunities for short-term traders.

These rapid market swings allow traders to capitalize on buying low and selling high.

Short-term trading does come with risks, which can be challenging to navigate. However, employing a quantitative system can help mitigate these risks.

Introducing Auspex, a quantitative screener designed to aid in effective trading, enabling you to maximize gains and minimize risks in volatile markets.

Auspex identifies stocks exhibiting:

• Growth in earnings, revenues, and margins
• Positive trends in both short- and long-term metrics
• Significant interest from analysts and traders

This tool helps target the strongest stocks present in the market.

Spending 30 minutes monthly can position your portfolio for potential growth. It is straightforward and could yield significant profits.

Implementing this system may enhance your ability to navigate today’s volatile market environment.

_{On the date of publication, Luke Lango did not hold (either directly or indirectly) any positions in the securities mentioned in this article.}