Stocks were slightly lower again Monday afternoon as volatility hit its lowest level since the early 1990s.
The S&P 500 was down 0.06%, and the Nasdaq declined 0.04%. The Dow Jones Industrial Average slipped 0.04%. The Volatility Index, often referred to as the fear index, declined by 7.9% to 9.74 on Monday. The index reached an intraday low of 9.70 earlier in the session, its lowest level since 1993.
The S&P 500 has fallen or risen by 1% or more only three times since the beginning of the year. The benchmark index has averaged 4.25 days of swings of more than 1% every month since 1950, according to CFRA.
The S&P 500 and Nasdaq notched new intraday highs shortly after market open. Jim Cramer laid out the powerful themes driving this bull market over on our premium site Real Money. Get his insights with a free trial subscription to Real Money.
"The markets have become 'comfortably numb' to almost any news item," said Paul Nolte of Kingsview Asset Management. "Whether it's the French election (yawn), the promise of higher interest rates (really!) or that commodity prices are falling hard (again), the markets just keep pushing ever higher ignoring what in the past would be market moving events. The drug of choice might be better-than-expected earnings or the hope of a better overall tax plan."
President-elect Macron won the French runoff election on Sunday in a decisive victory with 66% of the vote compared to Marine Le Pen's 34%. Macron had run on a platform of improving relations within the European Union and making the country more competitive in the global market.
Far-right nationalist Le Pen had called for stricter immigration laws and rejected France's position in the EU. Le Pen had frequently been compared to Donald Trump throughout the campaign. A win for Le Pen would have destabilized France's position in the EU and made the future of the bloc uncertain.
"The results are very positive from an economic standpoint and also bode well for the prospect of improving cross-border relationships within the eurozone," Todd Hedtke, chief investment officer, Allianz Investment Management -- US, wrote in a note. "From a capital markets perspective, this was the favored outcome and different from the Brexit vote or the U.S. election in that the polls had it right. Overall, the outcome of this event reduces uncertainty in Europe and paves the way for positive developments in the future."
European markets didn't rally, however, as the results were largely predicted. Polls heading into Sunday's vote indicated Macron had a wide lead over Le Pen. France's CAC 40 fell 0.9% on Monday, Germany's DAX declined by 0.12%, and the FTSE 100 in London slipped 0.09%.
The Federal Reserve should be careful to now go too slow in raising rates, Cleveland Fed President Loretta Mester warned on Monday. In comments at the Chicago Council on Global Affairs, Mester said "if we delay too long in taking the next normalization step ... we could risk a recession." The Fed opted to leave rates unchanged at its May meeting. The chances of a rate hike in June have grown in recent days.