Volatility has been the watchword for markets in the last several months, as worries over a hawkish Fed, sky-high commodity prices and geopolitical tensions stemming from the war in Ukraine roil asset prices.

The S&P 500 was recently down 0.2% on Friday and yields on the benchmark 10-year Treasury were at a near 4-year high of 3.08%, capping off a week that saw massive swings in stocks and bonds in the days following the Fed’s monetary policy meeting.

Here are charts showing how volatility has broken out across markets and various factors driving the moves.

A VOLATILE YEAR

Volatility has surged across asset classes over the last year, with stocks, bonds, currencies and commodities all experiencing more pronounced moves. Worries over how aggressively the Fed will tighten monetary policy in response to surging inflation has been a key driver of the moves, sparking gyrations in fixed-income markets, boosting the dollar to 20-year highs and weighing on stocks.

Concerns over how monetary policy tightening by central banks will affect global growth have recently come to the fore, with the Bank of England warning Thursday that Britain risks a double-whammy of a recession and inflation above 10% as it raised interest rates to their highest since 2009.

THE REAL DEAL

Another culprit – linked to expectations of a hawkish Fed – has been the sell-off in Treasuries which sent yields on the 10-year past 3% for the time since late 2018 on Thursday.

As yields climb, they can dull the allure of stocks, particularly those in high growth sectors such as technology, where companies’ cash flows are more weighted in the future and diminished when discounted at higher rates.

Meanwhile, real yields on the U.S. 10-year Treasuries – which subtract projected inflation from the nominal yield – recently turned positive for the first time since March 2020, eroding a key support for U.S. equities.

BUY THE DIP?

Volatility has weighed on investors and hammered sentiment. One possible casualty may be the strategy of buying the dip, or taking advantage of stock market weakness to scoop up shares on the cheap.

While dip buyers were generally rewarded over the last two years, as a dovish Fed helped buoy markets, stepping in to buy on weakness has become far riskier in recent months. There have also been signs that retail investors – who have been avid dip buyers in the past – are more hesitant to do so.