Today’s Market Plunge: A Chess Game Unfolding—Why I’m Still Bullish

Tariff Tantrum: Left Big Mad and Overreacting

The Dow’s down 2,000 points today—a gut punch after yesterday’s tariff-driven slide (Dow -3.22%, NASDAQ -5.49%). Volatility’s back with a vengeance, and it’s tempting to see red and panic. But at Global WEALTH, we’re stepping back to see the board, not just the pieces. Here’s why I think this sell-off is masking some brilliant moves—and why I’m still optimistic.

1. The 10-Year Yield: A Hidden Win The 10-year Treasury yield is dipping—down around 0.8% recently, hovering near 4.2% today amid the chaos. That’s not a fluke; it’s a lifeline. The government’s $35 trillion debt pile gets cheaper to refinance at these lower rates, saving billions annually. Treasury Secretary Scott Bessent has hinted at targeting a lower yield for months, calling it a way to “reorient the system” without sparking inflation (Fox Business, March 2025). If this is deliberate—using tariff headlines to spook markets into Treasuries—it’s a chess master’s gambit. Lower borrowing costs bolster fiscal flexibility, and that’s a long-term tailwind for growth. I buy it as a strategy, not just luck.

2. Who’s Selling, Who’s Buying? Today’s plunge smells like algorithmic trading and hedge fund unwinds—fast, emotionless sell orders amplifying the drop. Meanwhile, chatter on platforms like X and early data suggest retail investors are dipping in, snapping up bargains. JPMorgan noted last month that Tesla alone saw “unusually high” retail inflows during a dip (CNBC, March 20). Vanda Research tracks retail buying spikes during VIX surges, and with the VIX at 44 today, history says mom-and-pop investors often outlast the big funds here. If true, it’s an edge for the little guy—buying when the machines panic. Hard data’s still forming, but the pattern fits.

3. VIX at 44: Fear’s a Signal The VIX, Wall Street’s “fear gauge,” hit 44 today—its highest since August (Bloomberg, April 3). Historically, a VIX above 40 screams oversold conditions; it’s a buy signal more often than not. Look at October 2008 (VIX hit 80, then markets bottomed) or March 2020 (VIX 82, followed by a rocket rally). Can it stay above 40 long? Rarely—since 1990, it’s sustained that level for weeks only during true crises (2008, 2020). Today’s tariff panic isn’t that. Fear this high tends to exhaust itself, setting up a snapback. I’m watching closely.

4. This Too Shall Pass. Deep breath time. Sharp sell-offs—5% or more in a day—feel brutal, but they’re not rare. Since 1950, the S&P 500 has seen over 100 drops of 5%+, and most (70%) lead to rallies within a month, per Dimensional Fund Advisors’ data. Yesterday’s tariff hit softened by day’s end; today’s could too. Markets hate uncertainty, but they adapt. Patience pays.

5. Tariffs: Not the Inflation Monster Left-leaning pundits claim Trump’s tariffs (10% baseline, 25% on Canada/Mexico) will ignite inflation. I’m skeptical. Tariffs might nudge prices up short-term—imports are 13% of GDP, so a 10% tariff touches 1.3% of output—but they also slow consumption, curbing demand-pull inflation. Bessent argues China “eats” much of it via lower margins (Fortune, March 3), and Fed Chair Powell called tariff inflation “transitory” last month (CNBC, March 19). The 2018-2019 tariff wave barely moved CPI long-term. Fear’s overblown here.

6. S&P 500 Equal to Level One Year Ago: Up 100% Over Last 5-Years The S&P 500 is down sharply this year but still only down to year ago levels and is up double over the last 5-years.

Bonus Bullish Angles

• Rate Cuts Loom: The Fed’s still eyeing two cuts in 2025 (Yahoo Finance, March 21). Lower yields today could accelerate that, juicing stocks.

  
  

• Energy Resilience: Energy stocks are up 15% YTD despite tariffs (Yahoo Finance, March 21), a buffer for portfolios.

  
  

• Global Bounce: China’s Hang Seng is up 20% since January (NYT, March 16). If tariffs shift trade, others win—and U.S. firms adapt.

Today’s ugly. But the fundamentals—debt relief via yields, retail grit, VIX signals, and tariff reality—point to opportunity. At Global WEALTH, we’re built for this: long-term wins over short-term noise. Questions? Reach out.

Jim Palumbo is the Principal and Sole Investment Advisor at Global WEALTH. Views are his own, not advice.