Finance

Investors have fled stocks in favor of perceived safe havens like cash amid tariff-fueled market volatility.
Cash may feel safer, but it also comes with risks for long-term savers, experts said.
Cash interest rates generally lag stock returns by wide margins over time and are often negative after accounting for inflation.

Traders work on the floor of the New York Stock Exchange on April 10, 2025.
Michael M. Santiago | Getty Images News | Getty Images

Investors may feel an impulse to move to cash amid the recent tumult in the stock market. While cash might feel safer than stocks, it can also pose risks for long-term savers, financial advisors say.
Cash — like money held in a high-yield bank savings account or a money market fund — is substantially less volatile than stocks over the short term, experts said.

But cash has historically delivered lower returns than stocks over the long term. Holding on to more cash than you need — rather than investing it — raises the risk that you may not achieve your investing goals.
The upshot: Cash-heavy investors may find it challenging to achieve their long-term investment goals, and may have to save more of their discretionary income as a result, Vanguard wrote in a paper that analyzed stock and cash returns.

Investors fled stocks for perceived safe havens as U.S. stock benchmarks were whipsawed by tariff and trade proclamations from the Trump administration and retaliatory measures announced by major trade partners like China.
Following a White House announcement of country-specific tariffs earlier this month, the S&P 500 had its worst two-day stretch since the early days of the Covid-19 pandemic, losing about 11%.
Meanwhile, April 7 saw the highest volume of 401(k) plan trading since March 12, 2020, according to Alight Solutions, a retirement plan administrator. About 94% of proceeds moved to conservative assets like money market, bond and stable-value funds, according to Alight.

The pros and cons of cash

Cash does have some benefits.
For instance, it’s there when investors need money for emergencies and major purchases, even if there’s an upheaval in the stock market, said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida.
“Everyone should have some cash and some equities,” McClanahan, a member of CNBC’s Financial Advisor Council, wrote in an email.
But cash “has a long history” of offering negative “real” returns, meaning returns after accounting for inflation, according to Morningstar.

In other words, consumers who hold a portfolio that’s 100% in cash actually lose wealth over time after accounting for inflation, experts said. If interest rates on cash don’t keep pace with rising prices, consumers lose purchasing power.
Meanwhile, stocks have the potential for high growth, especially over the long term, but also come with risks, McClanahan said.
More from Personal Finance:3 ways to keep money safe amid market volatilityWhat advisors are telling clients after bond sell-offIs now a good time to buy gold?
“The ups and downs of the markets can be nauseating, and you might have to bank losses if you need your money and can’t ride out market downturns,” McClanahan said.
“Every portfolio should be diversified across safe and risky assets based on the client’s financial and psychological ability to take risk,” she wrote.

How to think of cash and stock mix

Investors who are still in the “accumulation” savings phase — i.e., people in their working years still saving a portion of their income — should hold enough cash for emergencies in a fund that’s easily accessible, McClanahan said.
They should also hold any cash they might need for purchases in the next five years, like a home down payment, car purchase or tuition expenses, she said.

The rest should be allocated to stocks and bonds based on their time horizon, as well as their “financial and psychological ability to take risk,” McClanahan said. For example, someone with 10 years to retirement should have a lower share of their portfolio in stocks relative to someone 30 years from retirement, she said.
People in or near retirement, when they will need to start withdrawing money from their portfolio, should hold enough money in cash, short-term bonds and certificates of deposit to fund five years of income needs, plus any upcoming major purchases, McClanahan said.
The rest should be in a diversified portfolio of fixed income and stocks, she said.

Even retirees generally need to allocate some of their portfolio to stocks: They may lean on their portfolios to fund their lifestyle over three or more decades, meaning some investment growth is necessary to avoid running out of money, according to experts.
All investors should have an investment strategy that spells out “how much they will have allocated to equities, fixed income [bonds], and cash and they should stick with this investment policy through all markets, good and bad,” McClanahan wrote in an email.

Don’t miss these insights from CNBC PRO More

Citigroup on Tuesday posted first-quarter results that exceeded analysts’ estimates as the firm’s traders generated more revenue than expected.
Citigroup’s fixed income traders generated $4.5 billion in revenue on heightened activity in markets for currencies and government bonds, 8% more than a year earlier.
Equities traders saw revenue rise 23% to $1.5 billion, topping the $1.4 billion estimate, as “increased market volatility” and higher client activity led to more transactions.

Jane Fraser, CEO of Citigroup, attends a hearing on Annual Oversight of Wall Street Firms before the Senate Committee on Banking, Housing, and Urban Affairs in Washington, D.C., the United States, on Dec. 6, 2023. 
Tom Williams | Cq-roll Call, Inc. | Getty Images

Citigroup on Tuesday posted first-quarter results that exceeded analysts’ estimates as the firm’s traders generated more revenue than expected.
Here’s what the company reported:

Earnings: $1.96 per share vs. $1.85 per share LSEG estimate
Revenue: $21.60 billion, vs. $21.29 billion expected

The bank said profit rose 21% to $4.1 billion, or $1.96 per share, on higher revenues and lower expenses from the year-earlier period.
Companywide revenue climbed 3% to $21.60 billion as the firm cited gains in its five major divisions.
CEO Jane Fraser said the bank was continuing to earn credibility with investors and that she remains focused on executing on her strategy, which includes a diverse set of businesses that “will perform in a wide variety of macro scenarios.”
She also seemed to address recent concerns about the U.S. economy that have surfaced as President Donald Trump sought to restructure deals with America’s trading partners.
“When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency,” Fraser said.

Citigroup’s fixed income traders generated $4.5 billion in revenue on heightened activity in markets for currencies and government bonds, 8% more than a year earlier and topping the $4.33 billion StreetAccount estimate.
Equities traders saw revenue rise 23% to $1.5 billion, topping the $1.4 billion estimate, as “increased market volatility” and higher client activity led to more transactions.
JPMorgan Chase, Morgan Stanley and Goldman Sachs each exceeded analysts’ estimates on a boom in equities trading revenue as the banks took advantage of volatility in the quarter.
Shares of Citigroup have dropped 10% this year amid a broad selloff in banks related to President Donald Trump’s tariff policies. More

The bank said profit climbed 11% to $7.4 billion, or 90 cents a share, as revenue rose 5.9% to $27.51 billion.
Those gains were fueled by net interest income that rose to $14.6 billion in the quarter, exceeding the $14.56 billion StreetAccount estimate.
Bank of America said its NII benefited from lower deposit costs and higher-yielding investments compared with the year-earlier period.

Brian Moynihan, chief executive officer of Bank of America Corp., during a Bloomberg Television interview in New York, US, on Tuesday, March 19, 2024. 
Jeenah Moon | Bloomberg | Getty Images

Bank of America on Tuesday posted first-quarter results that topped analysts’ expectations for profit and revenue on stronger-than-expected net interest income and trading revenue.
Here’s what the company reported:

Earnings: 90 cents a share vs. 82 cents per share LSEG estimate
Revenue: $27.51 billion vs. $26.99 billion expected

The bank said profit climbed 11% to $7.4 billion, or 90 cents a share, as revenue rose 5.9% to $27.51 billion.
Those gains were fueled by net interest income, which is the difference in what a bank pays depositors and what it earns on loans and investments, that rose to $14.6 billion in the quarter, exceeding the $14.56 billion StreetAccount estimate.
Bank of America said its NII benefited from lower deposit costs and higher-yielding investments compared with the year-earlier period.
“Our business clients have been performing well; and consumers have shown resilience, continuing to spend and maintaining healthy credit quality,” CEO Brian Moynihan said in a release. “Though we potentially face a changing economy in the future, we believe the disciplined investments we have made for high-quality growth, our diverse set of businesses, and the team’s relentless focus on responsible growth will remain a source of strength.”
Shares of the firm rose less than 2% in premarket trading.

The bank said equities trading revenue rose 17% to $2.2 billion, which slightly topped the $2.12 billion estimate, and fixed income revenue rose 5% to $3.5 billion, compared with the $3.46 billion estimate.
Investment banking fees slipped 3% to $1.5 billion, missing the $1.6 billion estimate, amid the industrywide slowdown caused by trade uncertainty.
The firm’s provision for loan losses, another key metric watched by investors as banks plan for a possible recession later this year, came in better than expected at $1.5 billion, compared with the $1.58 billion estimate.
Bank of America shares have sold off in recent weeks on concern that President Donald Trump’s tariff policies could cause a recession.
The company’s stock has fallen more than 16% this year through Monday.
JPMorgan Chase, Morgan Stanley and Goldman Sachs each exceeded analysts’ estimates on a boom in equities trading revenue as banks took advantage of volatility in the quarter.

Don’t miss these insights from CNBC PRO More

Dutch digital bank Bunq said Tuesday that it’s applied for a broker-dealer license, in an initial step toward securing a full banking license.
Bunq will be able to offer most of its services in the U.S. with the exception of savings deposits after securing broker-dealer authorization.
The bank reported a 65% jump in profits year-on-year to 85.3 million euros ($97.2 million), boosted by an increase in interest income.

Dutch digital bank Bunq is plotting re-entry into the U.K. to tap into a “large and underserved” market of some 2.8 million British “digital nomads.”
Pavlo Gonchar | Sopa Images | Lightrocket | Getty Images

Dutch digital bank Bunq on Tuesday said it’s filed for broker-dealer registration in the U.S. as it looks to further expand across the Atlantic.
Bunq CEO Ali Niknam said the broker-dealer application will be an initial step toward securing a full banking license. He couldn’t offer a firm timeline for when Bunq will secure this authorization in the U.S. — but said he’s excited for its growth prospects in the country.

Obtaining a broker-dealer license will mean Bunq “can offer our users who have an international footprint — which is the user demography we’re aiming for — a great number of our services,” Niknam told CNBC. Bunq mainly caters for “digital nomads,” individuals who can live and work from anywhere remotely.
Bunq will be able to offer most of its services in the U.S. with the exception of a savings account after securing broker-dealer authorization, Niknam added.
Bunq, which touts itself as a bank for “digital nomads,” currently has a banking license in the European Union. It has applied for an Electronic Money Institution (EMI) in the U.K. Bunq previously had operations in Britain but forced to withdraw from the country in 2020 due to Brexit.

Bunq initially filed for a U.S. Federal bank charter in April 2023. However, it withdrew the application a year later, citing issues between its Dutch regulator and U.S. agencies. The company plans to resubmit its application for a full U.S. banking license later this year.

65% jump in profit

Beyond the update on international expansion, Bunq also on Tuesday reported a 65% year-over-year jump in profit to 85.3 million euros ($97.2 million). That jump was primarily driven by a 55% increase in net interest income, while net fee income also grew 35%.

Similarly to fintech peers such as N26 and Monzo, Bunq has benefited from a high interest rate environment by pocketing yields on customer deposits sat at the central bank.
Bunq’s CEO told CNBC that, while high interest rates have certainly helped, more generally Bunq is seeing increased usage of the platform and has been focused on cost efficiency from an operational perspective.
“Because we are so lean and mean, and because we have set up all of our systems from scratch … we have been able to not only increase our profits, but also offer very good interest rates in the European market in general, and in the Netherlands specifically,” Niknam said.

More recently, central banks in the EU and U.K. and U.S. have moved to slash interest rates in response to falling inflation and concerns of an economic slowdown, which can bite into bank earnings.
Niknam said he’s not concerned by the prospect of rates coming down and expects potential declines in interest income to be offset by a “diversified” revenue mix that includes income from paid subscription products, as well as new features. Bunq recently launched a tool that lets users trade stocks.
“This is different in continental Europe to the U.K. We had negative interest rates for long,” Niknam told CNBC. “So as we were growing, actually our cost base was also growing because we had to pay for all the deposits that people deposited a Bunq so I think we’re in a great position in 2025
Bunq is coming up against heaps of competition, especially in the U.S. market. America is already served by established consumer banking giants, including JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. It’s also home to several major fintech brands, such as Chime and Robinhood. More

After almost quintupling in value on Monday, Webull has a market cap of $29.6 billion.
Founded in 2016, Webull gained traction in the U.S. four years ago as people used their stimulus checks during Covid to place trades.
Webull’s competitors include Robinhood, Charles Scwab and E-Trade.

Anthony Denier, CEO fo Webull, speaks during an interview on CNBC on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 1, 2022. 
Brendan McDermid | Reuters

Shares of Webull soared nearly 375% on Monday, the second day on the market for the stock-trading app, which completed its merger last week with SK Growth Opportunities Corp., a special-purpose acquisition company (SPAC).
The rally gives Webull a market cap of almost $30 billion.

Webull competes with Robinhood, Charles Schwab and E-Trade. The app lets investors buy and sell shares and options in individual securities, exchange-traded funds and cryptocurrencies, and offers charts, watchlists, screening tools and paper trading.
The company says it has over 23 million registered users and operates in 15 regions globally. In addition to charging fees on trades, Webull has a premium tier with real-time data that costs $40 per year.
In an investor presentation last month, the company said it was expecting $390.2 million in 2024 revenue, which would be roughly flat from 2023.
Former Alibaba and Xiaomi manager Wang Anquan founded Webull in 2016, and he remains the company’s global CEO. Investors include Coatue, General Atlantic and Lightspeed. The app gained popularity during the Covid pandemic, as U.S. citizens used stimulus checks to invest, Anthony Denier, the company’s group president and U.S. CEO, told CNBC in 2021. Webull users are “much more intellectual” than Robinhood’s, Denier has said.
In November, the U.S. House Select Committee on the Chinese Communist Party sent a letter to Denier inquiring about the company’s ties to China. The company didn’t immediately respond to a request for comment.

The rise of blank-check companies such as SK Growth Opportunities peaked in 2021, with 613 IPOs completed, according to SPAC Insider. The market fell apart the following year as soaring inflation and rising interest rates pushed investors out of risky assets. So far this year there have been 23 SPAC IPOs.
Webull said last year that it was planning for its market debut to take place in the second half of 2024.
WATCH: House Committee slams Webull over alleged ties to Chinese Communist Party More

The trading volume of 0DTE options tied to the S&P 500 surged to 8.5 million in April, a 23% jump since the beginning of the year and accounting for roughly 7% of the total volume in U.S. option markets, according to data from JPMorgan.
These securities have become a popular tool for investors, big and small, to make a quick buck or hedge against sudden event-driven moves in the broader market.

A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 11, 2025. 
Brendan Mcdermid | Reuters

Wild intraday gyrations in stocks since “liberation day” have put investors more on edge than ever, and the popularity of zero-day-to-expiration options is partly to blame.
Zero-day-to-expiration options are contracts that expire the same day that they’re traded. The trading volume of 0DTE options tied to the S&P 500 surged to 8.5 million in April, a 23% jump since the beginning of the year and accounting for roughly 7% of the total volume in U.S. option markets, according to data from JPMorgan.

These securities have become a popular tool for investors, big and small, to make a quick buck or hedge against sudden event-driven moves in the broader market. Many contend that large volumes of these short-lived vehicles can exacerbate price swings in the market as dealers and market makers buy and sell underlying assets to balance their positions. 
“You’re seeing the zero data options market amplify and exaggerate almost up or down. If you go back 10, 20 years, you didn’t have these catalysts,” said Jeff Kilburg, CEO and CIO of KKM Financial. “It’s almost like gasoline on a fire when you see a move being exaggerated by the underlying options move.”

Stock chart icon

Volatility surged as Trump introduced steep tariffs on key U.S. trading partners and repeatedly reversed and changed his own policy. On Wednesday, the S&P 500 posted its third-biggest gain in post-World War II history, following a four-day rout that briefly pushed it into bear market territory. Last week also saw the Dow Jones Industrial Average fall at least 1,500 points on back-to-back days, the first time in history.
The S&P 500’s intraday volatility almost doubled last week to 44%, exceeding the 2020 highs and is now reaching levels last seen during the depth of the 2008 financial crisis, according to data from Cboe Global Markets. This extreme uncertainty fueled the demand for 0DTEs as investors look to hedge risk and take advantage of the volatility.
“We find that 0DTE (+1DTE) have been instrumental in driving more intraday volatility, with this higher intraday activity not necessarily getting captured on a close-to-close basis,” Maxwell Grinacoff, UBS’ head of U.S. equity derivatives research, said in a note.

These options are also made more accessible for retail investors using online broker Robinhood. An option is a contract that gives its owner the right, but not the obligation, to buy or sell a specific amount of an underlying asset at an agreed-upon price, known as the strike price, and on a specific date.
“Options have been an institutional tool for decades now, and the sophistication of retail investors is allowing more and more people to utilize options to hedge or to simply speculate,” Kilburg said.
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.
In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Don’t miss these insights from CNBC PRO More

DONALD TRUMP has been adept at finding euphemisms for the chaos. When both stocks and bonds sold off last week, fuelling concerns about financial stability, Mr Trump said it was a case of people “getting a little bit yippy”. After pausing some tariffs for 90 days, he said all the turbulence was merely “a transition cost” en route to the glorious reconstruction of the American economy. “In the end it’s going to be a beautiful thing,” he purred. More

Here’s what the company reported: Earnings of $14.12 a share vs. $12.35 LSEG estimate
Revenue: $15.06 billion vs. expected $14.81 billion

David Solomon, CEO of Goldman Sachs, testifies during a Senate Banking Committee hearing at the Hart Senate Office Building in Washington, D.C., on Dec. 6, 2023.
Win Mcnamee | Getty Images

Goldman Sachs on Monday posted first-quarter results that topped analysts’ expectations on stronger-than-expected equities trading revenue.
Here’s what the company reported:

Earnings: $14.12 a share vs. $12.35 LSEG estimate
Revenue: $15.06 billion vs. expected $14.81 billion

The bank said profit rose 15% from the year-earlier period to $4.74 billion, or $14.12 per share, as revenue climbed a more modest 6% to $15.06 billion. It said that rising trading revenue in the quarter offset a slight decline in asset and wealth management revenue compared with a year earlier.
Goldman’s global banking and markets division saw a 10% rise in revenue to $10.71 billion as equity trading revenue rose 27% to $4.19 billion. That is about $540 million more from equities trading than what analysts surveyed by StreetAccount projected for the quarter.
The performance helped cover signs of weakness elsewhere. Goldman’s fixed income division saw revenue rise just 2% from a year earlier to $4.4 billion, missing the $4.56 billion estimate. Investment banking fees fell 8% to $1.91 billion, just below the $1.94 billion estimate, on lower advisory revenue.
Goldman CEO David Solomon hinted at the turmoil caused by President Donald Trump’s escalation of trade tensions this month in his remarks.
“While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients,” Solomon said in the release.

Meanwhile, in the firm’s asset and wealth management division, revenue fell 3% from a year earlier to $3.68 billion, just under the $3.69 billion estimate. Goldman said the decline came from “significantly lower” revenue from its investments including private equity, public stock and debt.
Finally, the firm’s platform solutions division saw revenue slip 3% to $676 million, just under the $677.5 million estimate.
Shares of the bank were up more than 3% in premarket trading.
Markets have whipsawed since Trump escalated trade tensions with U.S. trading partners this month, sowing uncertainty in the world’s largest economy. Goldman shares have dropped 14% this year through Friday.
Analysts will be keen to hear what Solomon has to say about his conversations with corporate clients amid the tumult.
On Friday, rivals JPMorgan Chase and Morgan Stanley each topped expectations for first-quarter results on booming equities trading.
Equities trading revenue surged 48% and 45% at the banks, respectively, thanks to volatility in the opening months of Trump’s tenure amid his efforts to reshape global trade agreements.
This story is developing. Please check back for updates. More