US stocks fluctuate after Dow swung 500 points in 25 minutes

Bloomberg

US equity indexes fluctuated after a tumultuous morning that saw the Dow swing more than 900 points in 25 minutes. The benchmark gauge for US share volatility went through wild gyrations after hitting a two-year high.
The S&P 500 Index plunged as much as 2.1 percent at the open of trading on Tuesday before regaining ground. The Dow declined more than 500 points before it, too, bounced back. Trading volume in both benchmarks was more than double the usual pace.
Earlier, the Stoxx Europe 600 Index slumped the most since June 2016, and Japan’s Nikkei entered a correction as most of the shares on the 1,000-plus member MSCI Asia Pacific Index declined. Amid the sea of red, some safe-haven assets, including European bonds, traded higher. Treasury yields swung before nudging higher. The dollar was little changed.
Treasury yields swung before nudging higher.
What began with rising bond yields became a selloff across global equity markets, as investors feared the return of inflation and higher rates that could erode profitability
for companies already trading at elevated valuations.
Traders are watching how the moves unfold from here—a sustained stock slump has the potential to undermine consumer and business sentiment, crimp borrowing and so start to curtail global growth.
“I think what you have is, this is a correction, not the start of an economic recession,” said Brent Schutte, chief investment strategist of Northwestern Mutual Life Insurance Co.’s wealth-management unit. “Corrections occur when people are positioned wrongly and have to position for the new environment. They can be sharp, but short.”
The Cboe Volatility Index, a gauge of implied volatility for the S&P 500 Index over the next month, breached 50 to touch its highest level since the aftermath of China’s devaluation of the yuan in 2015. Oil declined and metals fell. Bitcoin traded around $7,000 after at one point sinking below $6,000 for the first time since October. Monetary policy decisions are due in Russia, India, Brazil, Poland, Romania, the UK, New Zealand, Serbia, Peru and the Philippines.
Earnings season continues with reports from Walt Disney, SoftBank, Sanofi, Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter. Dallas Fed President Robert Kaplan and New York Fed President William Dudley are among policy officials due to speak in Frankfurt and New York.
The S&P 500 Index fell 0.9 percent as of 10:39 am New York time. The Stoxx Europe 600 Index decreased 1.9 percent. The UK’s FTSE 100 Index dipped 1.8 percent. The MSCI Emerging Market Index sank 3.1 percent to the lowest in five weeks.
The Bloomberg Dollar Spot Index increased 0.3 percent to the highest in almost two weeks. The euro decreased 0.4 percent to $1.2323, the weakest in almost two weeks. The British pound dipped 0.6 percent to $1.3871. The Japanese yen declined 0.2 percent to 109.26 per dollar.
The yield on 10-year Treasuries climbed six basis points to 2.76 percent. Germany’s 10-year yield declined four basis points to 0.70 percent. Britain’s 10-year yield fell four basis points to 1.514 percent, the biggest fall in almost five weeks. West Texas Intermediate crude dipped 0.3 percent to $63.94 a barrel.