Head-Spinning Swings for S&P 500 Are Raising Stakes for Traders

First the longs got burned. And then the shorts got squeezed.

Of course, that’s what happens in markets. But it’s been forever — 2 1/2 years, by one measure — since the S&P 500 Index has hosted this much drama. For three straight days, the benchmark for $29 trillion in equities has moved more than 2 percent, sinking to the worst week in two years before Monday’s stunning reversal.

Head-Spinning Swings for S&P 500 Are Raising Stakes for Traders

Net of everything, it’s a blip: stocks are near where they were on Valentine’s Day, a quarter of the way back from February’s lows. But for anyone forced to make bets in this market or, worse, divine a message from its swings, the last two weeks have been a gut check — a reminder of how hard it is to make money trading equities.

“Jump first, ask later and show no fear,” said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp. in Singapore. “This is what we get paid for.”

For an example of the challenge, look at Facebook Inc., rattled again Monday when an analyst raised concern about an advertising pullback and the FTC confirmed it’s investigating privacy practices. Down 10 percent in February and headed for its worst month in four years, the stock turned on a dime in the middle of the day and somehow erased a loss that had earlier swelled to 7 percent.

Head-Spinning Swings for S&P 500 Are Raising Stakes for Traders

It was the same story in the broader market — without the morning trauma. U.S. equities snapped back from the biggest weekly rout in two years, with major benchmarks climbing more than 2.7 percent on signs that an escalation of trade tensions was beginning to ease. Chipmakers and banks led gains as the S&P 500 Index posted its biggest one-day jump since August 2015, while 20 stocks climbed for each that fell.

Asian markets followed. Japan’s Topix index climbed 2.7 percent, pushing a regional MSCI gauge up 1.4 percent, while futures on the S&P 500 climbed. It’s all quite a change from the past two years, when equities barely wavered on their way to a 45 percent gain.