Markets saw renewed volatility recently, with the S&P 500 down more than 2% on January 20 amid concerns around potential U.S. policy actions and broader trade tensions, following recent developments in Venezuela. These events have raised questions about whether additional geopolitical actions may follow.
Japan’s bond market also experienced sharp moves, with yields rising to record highs on fiscal and tax-related concerns, contributing to broader global bond market volatility and highlighting how interconnected markets have become.
As a result, investors shifted toward traditional safe havens such as gold and U.S. Treasuries, with the 10-year yield rising to 4.29%. While notable, this level is simply a return to where yields stood last August, reinforcing that volatility is a normal part of market cycles.
The chart shows that while global events can influence markets in the short term, their impact typically fades over time. History has shown that long-term returns are driven more by underlying economic and market fundamentals than by geopolitical headlines.
