The SPDR S&P 500 ETF Trust (NYSE:SPY) experienced yet another week of wild trading to open the month of February as the climate of extreme market volatility continued. Several blue-chip stocks experienced huge swings in share prices this week after reporting fourth-quarter earnings numbers.
Mixed Signals: In the past week alone, Alphabet, Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) shares are up 8%, Meta Platforms Inc (NASDAQ:FB) shares are down 21.8%, Amazon.com, Inc. (NASDAQ:AMZN) shares are up 10.8% and Snap Inc (NYSE:SNAP) shares are up 25.9%.
To add to the confusion and volatility, the Labor Department released a much better-than-expected January jobs report on Friday morning. The U.S. economy unexpectedly added 467,000 jobs in January, far exceeding economist estimates of 150,000 jobs.
Related Link: US Adds 467,000 Jobs In January: 'Good For The Economy, But Not For Markets'
Even the strong jobs report elicited a mixed reaction from investors. Jobs growth is a bullish sign that the underlying U.S. economy is strong, but the big jobs beat added to concerns that the Federal Reserve may be forced to raise interest rates by 0.5% in March to offset U.S. price inflation that recently hit its highest level in roughly 40 years.
How To Play It: On Friday, former hedge fund manager Whitney Tilson said it's been a crazy week for big tech stocks, but investors should make sure to stay calm and rational in reacting to the market volatility.
"Such head-spinning moves are unsettling for many investors, causing them to trim or sell positions and position their portfolios defensively. But they should be doing the opposite," Tilson said in his newsletter.
Tilson said a volatile stock market provides unique opportunities for long-term investors.
"The best way to make money in the markets is to take advantage of other investors' mistakes – and when is that most likely to happen?" he said.
Benzinga's Take: The 2022 stock market volatility is all about interest rates. Investors are trying to decipher just how aggressively the Federal Reserve will need to raise interest rates this year to combat inflation and just how much of a negative impact those rising interest rates will have on earnings growth.
