Investors are grappling with sharp market swings fueled largely by algorithmic trading, said Fox news JD Fund Portfolio Manager Adam Johnson. Speaking about recent volatility, Johnson noted that computers now react instantly to headlines, especially negative ones, creating sudden drops followed by quick rebounds.
“In the past, traders would call each other to assess the situation,” Johnson said. “Now, algorithms hit the futures market within seconds of a bad headline. We’ve seen three major round trips in just ten days.”
Concerns have also grown over credit risks tied to regional banks, particularly those with exposure to the auto and auto parts industries. Johnson said some banks, including Zions Bank, recently reported provisions for bad loans that initially alarmed investors. “Zions took a $50 million adjustment — less than a tenth of one percent of their loan book,” he explained. “Once people analyzed the numbers, calm returned.”
Despite lingering credit worries, Johnson pointed to strong economic fundamentals. “The economy is still expanding near four percent,” he said. “Unemployment remains historically low at 4.2 percent, and corporate earnings are expected to post a fourth consecutive quarter of double-digit growth.”
He acknowledged market anxiety over U.S.–China trade relations, particularly following President Trump’s comments about unsustainable 100% to 157% tariff threats. “When the President called those tariffs unsustainable, it turned markets around,” Johnson said. “That statement reopened the door to talks with China’s leadership.”
Johnson also noted unexpected European support for the U.S. stance on rare earth trade policies, describing it as “a rare moment of alignment.” He said such developments show the administration’s negotiating style in full view — a strategy investors are learning to accept.
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“As a portfolio manager, I actually welcome this transparency,” Johnson added. “It’s part of how deals are made — the art of negotiation playing out in public.”
