Opinion: Navigating the pinball market

Joe Shearrer

If you’ve been paying attention to the stock market lately, you might feel like you’re standing in front of an old-school pinball machine – watching the ball ricochet in every direction, flashing lights going off, alarms buzzing and just when you think things are calming down … bam! Another jolt.

That ball? It’s the market. And every bumper it hits represents a new headline – interest rate speculation, inflation data, geopolitical tensions, corporate earnings or political uncertainty. One second, investors are cheering a rally. The next, they’re ducking for cover.

Like in pinball, success in this environment doesn’t come from trying to control every bounce. It comes from knowing how to play the game: keeping a steady hand, reacting wisely and avoiding the temptation to tilt when things get wild.

Seeing stocks, bonds and the dollar all fall at once is one of those pinball machine-like jolts and usually something you’d expect in struggling emerging markets – not in the U.S. But that’s exactly what’s happening now, and it’s raising red flags. While it’s not a financial crisis yet, the wave of selling is unsettling.

Things escalated when Treasury bonds began selling off the night of April 8, pushing the 10-year yield up to 4.47%. What’s troubling is that this bond sell-off is happening alongside a drop in the S&P 500 and the U.S. dollar, suggesting a broader loss of confidence. Initially, bonds gained after President Donald Trump announced new tariffs on April 2, but they’ve since reversed course. Surprisingly, the dollar fell, too, signaling that global investors might be losing faith in the U.S. economy’s strength.

Even more confusing: short-term yields have dropped (suggesting Federal Reserve rate cuts), but longer-term yields remain elevated. This disconnect shows just how uncertain the outlook has become.

Now, it seems like investors are pulling out of everything American – stocks, bonds and the dollar. Short-term Treasurys, usually seen as safe, are under pressure, which hints that foreign investors (who hold a big chunk of U.S. debt) may be selling.

Hedge funds could also be adding to the turmoil. Some may be unwinding complex trades tied to Treasurys, similar to what we saw during the March 2020 panic. These moves can put serious stress on the market, especially since banks don’t have the capacity to step in like they used to.

Still, it’s not full-blown panic. Key markets for short-term funding are still functioning, and any deeper cracks would likely trigger action from the Fed. More selling could deepen the cycle of falling confidence in both the dollar and bonds – and it may be a while before things turn around.

The market is also reacting to rising recession risks but hasn’t fully adjusted yet. The S&P 500 is only down about 12% from its peak – still around September levels. In past recessions, stocks have typically dropped 20% or more and erased much more than just a few months of gains.

This isn’t the first time we’ve seen stocks, bonds and the dollar move in unexpected ways – and it won’t be the last. While the headlines may spark fear, the underlying fundamentals of the U.S. economy remain intact, and mechanisms like the Federal Reserve are still in place to prevent a worst-case scenario.

So, yes, right now the market feels like a pinball machine on overdrive – loud, unpredictable and full of sharp jolts. But seasoned players know the goal isn’t to stop the chaos; it’s to navigate it with skill, patience and perspective. For long-term investors, the key is not to tilt the machine by making emotional decisions. Stay grounded, stay diversified and keep your hands on the flippers. Because in this game, it’s not the wild swings that define your outcome – it’s how you respond to them.

Joe Shearrer is vice president and wealth adviser at Fervent Wealth Management LLC in Springfield. He can be reached at joe@ferventwm.com.