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By Saqib Iqbal Ahmed
NEW YORK (Reuters) -President Donald Trump's first 100 days in office, set to deliver the worst start for stocks since former President Richard Nixon's second term in 1973, have stoked volatility across markets and created expectations of a semi-permanent state of uncertainty.
Expectations for near-term volatility in stocks, bonds and currencies have all leaped higher as investors game out the fallout from a rapidly changing landscape for trade.
In early April, the Cboe Volatility Index - an options-based barometer of investor anxiety - closed at a five-year high while FX and bond market volatility gauges also rallied. Measures of volatility have since come back but are still above pre-inauguration levels.
Stock volatility futures several months out show investor expectations for heightened volatility to persist.
"I think they've injected a sort of a semi-permanent uncertainty here," Matt Thompson, co-portfolio manager at Little Harbor Advisors, said.
Worries over how tariffs will affect economic growth, consumer spending and inflation drove the S&P 500 sharply lower from the record high touched within a month of Trump taking office, sending the index to the brink of confirming a bear market.
While stocks have recovered ground, the index is on track to end the first 100 days since inauguration down approximately 8%, marking one of its worst performances for a post-inauguration period.
The dollar also appears shaky, with the dollar index down about 9% in Trump's first 100 days, the index's worst showing ever for a President's initial months in office, suggesting investors are viewing U.S. assets with skepticism.
For the 100 days, U.S. Treasury market returns as measured by the ICE Bank Of America United States Treasury Index, however, were the second highest in recent presidential history, after former President Bill Clinton's first term.
"We're facing a secular shift in global trade that began in the early 1980s," Jack Ablin, chief investment officer at Cresset Capital in Chicago, said.
While a temporary pause on some tariffs has calmed nerves somewhat, investors are increasingly unsure if the world has changed for the foreseeable future.
Wednesday marks the second Trump administration's first full 100 days.
The White House did not comment on the market declines in the second Trump administration's first 100 days, but highlighted progress made on curbing inflation as well as investment pledges by major companies.
"Within 100 days of President Trump’s second term in office, Americans saw the first monthly price drop in years in the March inflation report, while industry leaders ranging from Apple to Hyundai to Nvidia have made trillions in historic investment commitments to reshore manufacturing back to the United States," White House spokesperson Kush Desai said.