Dow Logs Third 1,000-Point Swing in Four Days as Volatility Persists

By Olivia Hart

The Dow Jones Industrial Average recorded its third swing of more than 1,000 points in four trading days on Monday, a stretch of turbulence unmatched since the pandemic lockdowns of March 2020, according to Dow Jones Market Data.

Investors bought stocks aggressively, encouraged by falling oil prices after constructive signals from the Middle East and a national average gasoline price back below $4 a gallon, as reported by GasBuddy. The relief followed Thursday's tech-led selloff, which erased several trillion dollars of market value from the S&P 500 and the Nasdaq Composite.

"Last Thursday, the dam broke," said Chris Galipeau, head market strategist at the Franklin Templeton Institute. Investors subject to volatility constraints, stop losses or margin calls experienced a "pretty good flush, especially in tech," he said Monday.

How broad was Monday's rally?

Breadth, not just the headline gain, stood out. A total of 432 components of the S&P 500 rallied — the index's highest number of gainers in a single trading day this year, according to Dow Jones Market Data. Industrials and consumer-discretionary stocks surged, alongside tech, materials and real estate.

The S&P 500 also recovered $1.5 trillion in market value on Monday, its largest single-day gain since March 30, per Dow Jones Market Data.

Not everything participated. Nvidia shares fell more than 4% Monday and sat 22% lower than a month earlier, according to FactSet data. The drop came amid an investigation into Nvidia CEO Jensen Huang's relationship with a woman who reportedly worked as a foreign-intelligence asset for China. Other parts of the artificial-intelligence trade bounced back regardless, though chip stocks recovered only a little more than half of the prior week's losses.

Takeaway: the rally was real and broad, but it repaired only part of the damage.

Why isn't the volatility over?

The strategists MarketWatch cited agree on one point: calm is not imminent.

"I think we will continue to see big moves from here, and I don't think the volatility has gone away," Galipeau said.

A central reason is renewed anxiety around the AI buildout — and, specifically, Washington's shifting posture toward it.

"You had a large tailwind for AI, as a whole, from Washington, D.C.," said Mike Treacy, head market analyst at Apex Fintech Solutions. "Now that the country has voted, and there has been a change in leadership [in Congress], it appears that the new leadership could serve as more of a headwind than the tailwind of the last two years."

Treacy put the shift more bluntly: "It took one election and a poor Nvidia headline to go from D.C. being a tailwind to D.C. as a potential headwind."

What do the volatility gauges show?

One widely watched measure pointed toward calmer conditions. The Cboe Volatility Index, the stock market's so-called fear gauge, moved back closer to its historical average near 20 on Monday — a reading that implies potentially less turbulence over roughly the next 30 days.

Treacy cautioned against reading too much into that. He argued the better gauge of this year's tumult is the Cboe Nasdaq Volatility Index, or VXN, which tracks the Nasdaq-100 rather than the S&P 500-focused VIX.

"When you look at the VXN chart and how it's behaved this year, it's more representative of the volatility that we've seen — both up and down," Treacy said.

The distinction matters numerically. After last week's spike, the VXN remained near 34 — well above its longer-run range near 25. Treacy said he will stay on alert for further tumult until the gauge falls back toward that level.

Takeaway: the headline fear gauge looks benign, but the tech-heavy measure says the storm has not passed.

The question hanging over the market is whether a Congress less friendly to AI spending, combined with leadership uncertainty at Nvidia — where observers see no obvious successor to Huang — will keep whipsawing the indexes. Until the VXN retreats toward 25, Treacy's stance amounts to a warning: the four-day stretch of 1,000-point Dow moves may not be the last.