With the Dow up 92 points on Monday and down 226 yesterday, there's little doubt that stock market volatility is back.
What's driving the market swings: earnings, worries about the housing slump and interest rates.
"We're certainly in for a volatile day," says CNBC “Squawk Box” guest Peter Yastrow, MF Global market strategist from the floor of the Chicago Mercantile Exchange. "I think that the unknown right now is driving everybody's imagination a little bit and we have banks involved and credit analysts are notoriously slow to work through a problem and I think that's why you're going to see banks lag here."
Financial stocks led the way lower Tuesday among major S&P 500 stock group and have been down for the last 5 sessions.
Yastrow says, "it's not so much that there is a problem but that there might be and people are just going to avoid those areas."
Yastrow also sees volatility signaling a direction on interest rates that may surprise some. "We're seeing volatility getting priced in though interestingly enough in the interest rates they're not fearing a Fed tightening, they're fearing a Fed easing. So you see volatility on some sides of the market and not on both sides."