Why uncertainty makes the stock market go haywire

cnbc.com:

Uncertainty isn't in short supply these days — and investors have taken notice.

See-sawing policy from the White House has given investors whiplash on many fronts — with tariffs being among the biggest question marks, market experts say.

Coupled with uncertainty around federal job cuts, negotiations to end the war in Ukraine and other issues, the combination has been «disorienting to market sentiment,» Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute, wrote Wednesday.

Stocks have wobbled amid the vertigo.

The S&P 500 entered a correction last week, meaning the U.S. stock index fell 10% from its recent high mark in February. The index has recovered a bit but teetered on the edge of a correction Tuesday afternoon.

The benchmark is down about 5% in 2025.

Uncertainty makes investors jittery — and stock markets volatile — because they don't know how policy and other events will impact companies' ability to make money, said Barry Glassman, a certified financial planner and founder of Glassman Wealth Services.

Worried consumers might pull back on spending, crimping profits, for example. Tariffs raise costs for certain companies to import or produce goods — and it's unclear how other nations might retaliate. While economists generally don't think federal trade policy and job cuts will push the U.S. into recession, Trump hasn't ruled out that possibility.

«All of this comes down to corporate profits,» said Glassman, a member of CNBC's Advisor Council. «People will put more dollars where they have greater confidence in the investments,» he added.

There's always uncertainty in the stock market, but it may feel more acute right now than at other times, experts said.

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