U.S. stocks down heavily as volatility has its biggest-ever intraday spike

U.S. stocks plunged on Monday. The S&P 500 was down as much as 4.25 percent in early trading, its biggest one-day drop since September 2022, but that proved to be the low point as the benchmark US stock gauge ended down 3 percent. The Nasdaq composite was down 3.43 percent, while the price-weighted Dow Jones Industrial Average lost 2.6 percent, or over 1,000 points.

Two major market trends reversed courses amid a broad global market sell-off: the outperformance of AI-linked stocks and the appreciation of U.S. dollars relative to Japanese yen. The Bank of Japan raised its key interest rate to about 0.25 percent from zero to about 0.1 percent, boosting the value of yen to a seven-month high. 

The VIX index, which tracks the market’s expectations for volatility over the next month, had its biggest intraday rise of all time, up 66.18 percent today. The “fear gauge” hit levels only exceeded by the 2008 financial crisis and the 2020 pandemic.

The S&P sector ETFs were slammed across the board, while tech was the worst-performing with a 3.77 percent retreat. Chip stocks continue to suffer from the downturn as investors questioned the health of the U.S. economy and the sustainability of A.I.-driven gains. The iShares Semiconductor ETF was down 1.76 percent today, while Nvidiawas down 6.36 percent, making it the second-worst performing S&P 500 constituent.

Shares of Apple fell 4.82 percent today after Berkshire Hathaway disclosed that it sold almost half of its Apple shares over the weekend. 

The only good news is Kellanova, whose shares climbed 16.23 percent today. The jump came after reports surfaced over the weekend that Mars, the owner of M&M’s and Snickers, was in late stage talks to buy the maker of Cheez-It and Pringles.