Markets don’t like surprises. But they got one today.
The unexpected news of the FBI’s latest review of Hillary Clinton‘s emails spurred a frenzy, erasing gains made earlier in the day.
While polls of public opinion over the revelation will take some time to be conducted, markets were quick to react.
Just before the news broke today, the Dow was up about 80 percent, spurred by earlier news that the economy was growing faster than expected.
But as the breaking news graphics lit up televisions shortly after 1 p.m. ET, those gains were erased and other markets began a wild afternoon ride.
The Mexican peso also reacted strongly to the news, as it has to other developments during recent campaigning.
“In this election season the Mexican peso exchange rate has been following the polls for Donald Trump,” Rob Haworth, senior investment strategist at U.S. Bank in Seattle, told ABC News.
The strategist said Trump’s positions regarding trade and immigration with Mexico, “if implemented, are likely to have a significant impact on one of our largest trading partners and its economic activity.”
Yahoo Finance PHOTO: USD to MXN PESO Exchange Rate
Surprise could be seen in another number: the VIX.
The VIX, also known as the CBOE Volatility Index, is sometimes called the “fear gauge” because it measures expected jumpiness in markets.
It spiked just after the news broke and was at one point in the afternoon about 18 percent higher than it was at 1 p.m. It remained elevated throughout the afternoon.
Similarly, gold, where investors often run when they’re jittery over developments, also rose.
But don’t think this spike is permanent, Haworth said, “unless there is a significant change in presidential election polls, gains will likely be somewhat fleeting.”
It’s important to note that the market movements were not that dramatic when looked at over the length of the election. Other events have swung these same numbers more dramatically.
But they do suggest that the FBI news surprised markets and wiped out the gains made earlier in the day.
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