What happened

Cruise-line stocks continued their volatile run on Tuesday, but this time shares are bouncing higher. Carnival (CCL 0.69%) was up 14.9% early in the day and was up 6.7% at 2:55 p.m. EDT; Royal Caribbean Cruises (RCL -0.84%) jumped 17.1% and was later up 10.1%; Norwegian Cruise Line Holdings (NCLH 1.24%) was up as much as 14.3%, but by mid-afternoon was up just 3.2%.

So what

The big reason cruise-line stocks are up today is that the market is up big. The S&P 500 is up 3% as I'm writing. And highly volatile ("high beta") stocks, like those of cruise lines, tend to exaggerate the market's moves overall.

Cruise ship sailing at dusk under a partly cloudy sky

Image source: Getty Images.

On a more tangible level, Carnival started to lay out its plans for reopening its business, which could be seen as a bullish sign. After getting a 100-day "no sail" order from the Centers for Disease Control and Prevention (CDC), which ends on June 26, the company said it would resume sailing on June 27 for most North American trips. The one exception is Carnival Sunrise seasonal trips out of New York, which were canceled through the end of 2020.

Carnival has been the most aggressive line in reacting to the COVID-19 shutdown and shoring up its finances, so it's worth watching as it tries to get back to business. If it has ships sailing again, the government allows them to sail, and customers are willing to buy tickets, then maybe the business will recover some of what it lost by the end of the year. But as we've seen in recent weeks, the rules of the game can change -- and right now the downside risk is still high for cruise-line stocks.

Now what

The ups and downs continue for both cruise-line stocks and the market overall, and right now traders seem to be optimistic that the COVID-19 pandemic is getting under control and the country will be able to get back to work sometime soon. The risk here is that there will be continued outbreaks as stay-at-home orders are lifted, and those shut the economy down once again.

Unfortunately for the cruise-line business, ships have already been labeled high-risk places, and the CDC told people early on to avoid going on cruises. So, continued outbreaks could shut the business down again, even before the June 27 reopening date. With so much uncertainty, I'm not buying cruise-line stocks. But if cruise-line companies do get back to business this summer, it will be a sign that the economy is open again too, which would be great for everyone.