Has the stock market hit bottom? History is a guide

Stocks

Summary:

Despite a recent rally, the S&P 500 remains below its peak, weighed down by the trade war. History offers guidance, but political uncertainty keeps the market bottom unclear.

US stocks soared Wednesday, but the S&P 500 is still trying to climb out of a slump instigated by President Donald Trump’s trade war.

After hitting a record high in February, the S&P 500 dropped into correction in March as Trump unveiled his plan for tariffs. The benchmark index as of Wednesday was still down 12.5% from its peak two months ago. (A 10% decline from a peak is considered a correction. A 20% decline from a peak is considered a bear market).

The S&P 500 has shed $6.5 trillion in market value since its record high in February, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

As stocks have gyrated, investors are wondering when the market might find a bottom.

The truth is: No one can know for sure.

The market hit its lowest closing price this year on April 8, down 18.9% from its February peak. The S&P 500 has yet to test that low again, and it’s anyone’s guess whether the market continues climbing higher.

While uncertainty is rife, history can serve as a guide as to when the S&P 500 might find a bottom.

Four months to bottom, historically

The S&P has had 24 corrections since the end of World War II, according to Sam Stovall, chief investment strategist at CFRA Research. Historically, when the S&P entered correction but did not enter a bear market, it took the index an average of 133 days to find a bottom, and an average of 113 days to recover.

If April 8 turns out to be the market’s bottom, it would be just 48 days from February’s peak to bottom — much faster than the historical average.

Additionally, it has historically taken the S&P 500 an average of 77 days to go from a peak to confirming a correction, according to Stovall. This year, it took the benchmark index just 22 days to confirm a correction (a peak on February 19 to a correction on March 13), which is also much faster than the historical average.

Typically, when there is a sharp decline from a peak to correction, the slump tends to be relatively short before the market recovers, according to Stovall.

“Swift declines tend to be shallow and short-lived,” he said. “History is a great guide, but it’s never gospel, so we’ll have to wait and see whether that will hold true.”

And vast uncertainty looms. The market correction this year has been driven by the White House’s policy, Stovall said, which is historically rare.

“The only problem is that this is what I call a manufactured correction, meaning that it started because Trump initiated a trade war,” he said. “It is because of what the current administration is doing.”

Retesting the low and 1987

The S&P 500’s closing price on April 8 was 4,982.77. Some Wall Street analysts expect the market to “retest” that low before finding a bottom.

“In order for the April 8 lows to hold, investors must see enough of a trade policy shift to give them hope that the worst has passed,” said Nick Colas, co-founder of DataTrek Research, in a Monday note.

Colas noted that “modern market lore” about retesting lows can go back to the 1987 market crash. On October 19, 1987, The S&P 500 plummeted 20.5% before rebounding about 14% across the next two days. Yet the benchmark index struggled to hold on to those gains and eventually retested its October low point in December. Despite briefly falling below the October low, the December retest turned out to be the bottom.

“Then … the index rallied 10.3% through year end,” Colas said. “Investors saw that as an ‘all clear’ sign, and the S&P went on to gain 16.5% in 1988.”

Colas noted that not every market slump historically needed to retest its low, though he said it is “likely” this year due to the amount of uncertainty swirling through markets.

Ed Yardeni, president of Yardeni Research, said in a Monday note that the S&P 500 is likely to retest its April 8 low and “probably find support there.”

“If so, then the market may be forming a bottom,” Yardeni said.

V-shaped recovery or sideways grind

The last time the S&P 500 entered a correction was in 2023, when it fell from a peak on July 31 to a bottom on October 27. After hitting a bottom, the S&P 500 recovered swiftly in just 24 days.

Adam Turnquist, chief technical strategist at LPL Financial, said he has been hesitant to call for a swift recovery this year. He said he has not seen the hallmark signs of a recovery, like investors shifting out of defensive stocks and into cyclical stocks.

“It’s still very defensive right now, which gave us pause in terms of calling for any type of V-shaped recovery,” he said. “In terms of history, more often than not, you tend to retest the lows.”

Turnquist said it seems like “peak fear” has passed, which could be a good sign for momentum. The CBOE Volatility Index, or Wall Street’s fear gauge, hit its highest level this year on April 8. CNN’s Fear and Greed index also slumped to its lowest level this year on April 8.

“What comes next is a grind sideways as we need to build a base to begin the next leg up,” said Kim Abmeyer, a certified financial planner and founder of Abmeyer Wealth Management.

Larry Tentarelli, founder of Blue Chip Daily Trend Report, said in a Wednesday note that the “key range levels” for the S&P 500 are 5,100 and 5,500. At Wednesday’s close, the index stood right in the middle at 5,376.

“Whichever level breaks first on a closing basis will likely signal the next leg of this move,” Tentarelli said.

There has also been pervasive bearish sentiment in the market, which can be a buying signal. The latest survey from the American Association of Individual Investors showed that for the past eight weeks, more than 50% of respondents have been bearish on the US stock market.

Yet there are less optimistic signs, too. The S&P 500 on April 14 experienced what Wall Street calls a “death cross,” when the index’s 50-day moving average closed below its 200-day moving average. That can be a sign of more selling to come, according to Stovall.

Markets reward patience

It is incredibly difficult to pinpoint a market bottom in the midst of a slump. What matters for investors is being patient and having a plan, according to Yusuf Abugideiri, a certified financial planner and chief investment officer at Yeske Buie.

“The patient, disciplined, policy-based investor ultimately is going to be rewarded over the long run,” Abugideiri said. “That’s the way the market makes you work for the returns. You’ve got to be patient; you’ve got to be disciplined.”

Younger investors with long-term goals should see a market correction as a buying opportunity while stocks are on sale, he said. Meanwhile, if you are approaching retirement, diversifying your portfolio into more Treasuries and cash equivalents like money market funds can help protect your investments.

While a variety of factors influence finding a bottom, Abugideiri said, the outlook for the market largely hinges on investors getting more clarity from the White House.

“If investors get more clarity and have to deal with less uncertainty, markets are going to react favorably,” Abugideiri said.

Source: edition.cnn

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Owen Li

Economic

Stocks

Software firm ServiceNow (NOW.N), and toymaker Hasbro (HAS.O), topped the S&P 500 (.SPX), rising 14.8% and 15.7%, respectively, after both companies reported better-than-expected quarterly results.

ServiceNow lifted the information technology sector (.SPLRCT), 2.7%, while megacap stocks further added to tech gains.

About 73.9% of the 157 companies in the S&P 500 that have reported first-quarter earnings to date have exceeded analyst expectations even amid tariff uncertainty, as per data compiled by LSEG.

Markets are also reacting to U.S. Treasury Secretary Scott Bessent's comments that the current levies the world's two largest economies have slapped on each others' goods were "unsustainable", a day after reports said the White House was considering slashing Beijing tariffs.

"Recent developments suggest a less aggressive approach to resolving trade disputes," said Ulrike Hoffmann-Burchardi, chief investment Officer of global equities, UBS Global Wealth Management.

"The market's strong rebound reflects growing confidence that the most adverse outcome can be avoided, though upcoming news flow will likely continue to drive short-term swings."

Economic data also helped lift some sentiment, with reports showing only a moderate rise in weekly jobless claims and a much larger-than-expected jump in March orders for durable goods.

At 11:54 a.m. ET, the Dow Jones Industrial Average (.DJI), rose 310.48 points, or 0.78%, to 39,917.56, the S&P 500 (.SPX), gained 78.96 points, or 1.47%, to 5,454.82 and the Nasdaq Composite (.IXIC), gained 338.19 points, or 2.02%, to 17,046.06.

Though markets have cheered signs of a softer trade stance, plenty of uncertainty remains, with Bessent saying a move to reduce levies would not come unilaterally, and China responding that the U.S. should lift all unilateral tariff measures if it "truly" wants to solve the trade issue.

A deluge of changing headlines and the lack of clarity in the market are making it difficult for investors to assess the impact of Trump's changing stance on trade policy, creating a volatile environment.

All three major indexes are in the red year-to-date and the S&P 500 is down over 11% from its February record close. Deutsche Bank slashed its year-end target for the benchmark index to 6,150 from 7,000 previously.

Numerous companies have flagged the impact of tariffs on their outlook as well.

Proctor & Gamble (PG.N), fell 5.2% after cutting its annual profit forecast, while Alaska Airlines (ALK.N), slumped 9.8% after it, along with several other airlines, withdrew financial forecasts.

Alphabet (GOOGL.O), rose 1.8% ahead of its results, expected after markets close.

Advancing issues outnumbered decliners by a 4.59-to-1 ratio on the NYSE and by a 2.48-to-1 ratio on the Nasdaq.

The S&P 500 posted 3 new 52-week highs and 4 new lows, while the Nasdaq Composite recorded 29 new highs and 40 new lows.

Source: Kitco

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Adam

Economic

NEW YORK, April 24 (Reuters) - Federal Reserve officials speaking in television interviews on Thursday indicated they see no urgency for a change in monetary policy as they seek more information to determine how the Trump administration’s trade tariffs are affecting the economy.

Fed Governor Christopher Waller said in a Bloomberg interview that given the cadence of the administration’s shifts on import taxes, it wouldn’t be until some time this summer that some sense of how this is playing out will start to emerge, which suggests no imminent change in monetary policy. That sense of patience on policy was shared by Cleveland Fed President Beth Hammack, who spoke on CNBC.

“I don't think you're going to see enough happen in the real data in the next couple of months, until you get past July,” Waller said. “When you get to the second half of the year, I think we'll start having better ideas what's going to happen with the tariff world that the administration is considering.”

Waller reiterated his view that he believes the tariffs, which many economists, as well as central bankers, reckon will push up inflation while pushing down employment and growth, will have a one-time effect on price pressures. If it plays out like that and inflation does not prove enduring that suggests Fed policy may not need to react.

“The economics tells me that the tariffs are a one-time price level effect that’s going to pass through,” Waller said. Some of the inflation impact of higher import prices would be offset by weakening consumer demand, falling employment and negative hits to household wealth, he said, so when it comes to the rising inflation, “it may not be as high as people think.”

Waller said that navigating a one-time price jump without reacting would be challenging for the central bank given the pandemic experience of believing the inflation surge then was temporary, only to find out it wasn’t.

“It’s going to take some courage to stare down these tariff increases in prices with the belief that they are transitory,” Waller said. But, “the question is, what are the things that will cause this inflation to persist through the initial tariff increases? And I just have a hard time seeing exactly what that would be.”

Waller did note that if the economy weakened quickly that would change his monetary policy calculations.

“If I saw enough movement in the unemployment rate to make me think that things were going bad, or growth prospects started tanking, or consumer spending started really going down, then I'd be ready to go” with changes in interest rates, Waller said. “I wouldn't be sitting here waiting to determine whether the inflation is transitory or not.”

A LITTLE PATIENCE

Over recent weeks a wide range of Fed officials have signaled that now is a time to be patient on the monetary policy front while taking in data to determine how the tariffs will influence economic momentum. Adding to the challenges is the president’s erratic implementation of the import tax, with some key levies paused after financial markets convulsed in reaction to their announcement.

Financial markets broadly expect the Fed to cut what is now a 4.25% to 4.5% federal funds target rate range as the year progresses and Fed forecasts from the March Federal Open Market Committee meeting also penciled in easings. Tariffs have made the calculus harder because higher inflation and a weaker economy argue for different policy responses and the Fed choosing which side of its inflation and job mandates matters more at the moment.

In her CNBC interview, Hammack called for patience on monetary policy amid high levels of uncertainty. But she did not rule out monetary policy changes by June if the data suggested action was needed.

“We'll be watching the data carefully and I enter every meeting with an open mind about whether it's a time that we should be continuing to be patient, or a time that we should take action,” Hammack said. “If we have clear and convincing data by June, then I think you'll see the committee move, if we know which way is the right way to move at that point in time,” she said.

Hammack was asked if she could see the Fed easing at the May 6-7 Federal Open Market Committee meeting and appeared to lean strongly against that. "I think it's too soon" to change interest rate policy next month, Hammack said.

The bank president also said she does not have a base case for the economy right now but is thinking of the outlook in terms of scenarios.

Source: reuters

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Adam

Forex

The Swiss Franc has been on a tear of late against the USD and a host of other currencies. The CHFs rapid rise has come about amid the rise in uncertainty and a demand for safe havens. The beneficiaries being the traditional havens like the Japanese Yen, the Swiss Franc and of course Gold.

The Swiss Franc is an interesting one though given the reliance of Swiss business on the export market. Swiss Franc gains last year already prompted businesses to bring up the idea of intervention by the Swiss National Bank to assist.

The Franc or Swissie as it is also known, has jumped about 9% against the dollar this month, marking its biggest monthly rise since the 2008 financial crisis. Last week, it reached its highest level since January 2015, when the SNB ended its minimum exchange rate policy.

USD/CHF Analysis: Will Swiss National Bank (SNB) act on CHF surge?_1

This begs the question, will the SNB step in and intervene?

Well voices on the matter are certainly growing with Jean-Philippe Kohl, vice director of industry association Swissmem saying he did not demand SNB action but would welcome any moves by the central bank to mitigate the franc's rise.

Swiss National Bank (SNB) response

The SNB stated this month that it doesn’t manipulate currency and only steps in to maintain price stability. It also mentioned the possibility of bringing back negative rates.

However, negative rates, used from 2014 to 2022, were unpopular with banks, savers, and pension funds, making interventions seem like a simpler option.

While a lot of the focus has been on the performance of the Swissie against the US Dollar, policymakers are likely focused on the Swiss currency's rise against the euro since most Swiss trade is with eurozone countries, making euro-priced imports a bigger factor in inflation.

In 2023, 57% of Swiss imports were in euros, compared to 13% in dollars. The central bank says it doesn’t focus on single currency pairs but looks at a range of currencies to guide its policy and ensure it meets its inflation target.

Irrespective of the comments thus far, the SNB may be running out of options. The rise of the Franc has put the Central Bank in a difficult situation with the likelihood of intervention growing.

Technical Analysis - USD/CHF

From a technical standpoint, USD/CHF appears to have found a bottom around the 0.8079 handle with the last two days of bullish daily candle closes a positive sign for further gains.

However, today's daily candle is on course for an inside bar handing man candle close which is a bearish sign and may spook market participants. Given that the moves are largely driven by tariff developments, a visit to recent lows cannot be ruled if the US-China stalemate drags on.

USD/CHF Daily Chart, April 24, 2025

Dropping down to a four-hour chart and the trendline break does support further upside.

A move higher faces resistance at 0.8350 and 0.8409 handles before the 200-day MA and significant swing high at 0.8577 come into focus.

There is also a chance of a trendline retest if the tit-for -tat between the US and China continues.

In such a scenario, support rests at 0.8200 before the trendline becomes support and lastly we have the psychological 0.8000 handle which could finally come into play.

USD/CHF Four-Hour Chart, April 24, 2025

Client sentiment data

Taking a look at client sentiment data and 86% of traders are currently net-long USD/CHF. I tend t take a contrarian view toward sentiment which means that USD/CHF could face a downside correction in the short-term.

Source: marketpulse

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Damon

Cryptocurrency

Despite speculation in recent days about progress in trade discussions, China officially denied any such advancements, rejecting the idea that a deal is near. The country’s Ministry of Commerce reiterated that talks can only proceed if all unilateral tariff measures are fully withdrawn by the U.S.

A Harsh Message from Beijing

In a firm statement, Ministry of Commerce spokesperson He Yadong responded directly to recent U.S. commentary. “The unilateral tariff measures were initiated by the United States. If the U.S. truly intends to resolve the issue, it must completely cancel all tariffs on Chinese goods and find a way to address differences through equal dialogue,” he said.

This comes after the U.S. Treasury Secretary acknowledged that the trade war is “not sustainable” and emphasized the need for both sides to reduce tensions. Nonetheless, China’s response indicates that it will not return to the negotiating table under current conditions.

While Trump’s recent comments appeared to suggest flexibility, Beijing’s firm stance indicates that there is no official negotiation or consultation currently underway, particularly on tariff issues.

Implications for the Crypto Market

From the perspective of Dey There, geopolitical developments like this are not just diplomatic or economic matters—they ripple into the cryptocurrency space. With no agreement in sight, market uncertainty is likely to increase, potentially leading to greater volatility in traditional and digital assets alike.

Cryptocurrencies tend to benefit in times of geopolitical instability, as investors seek alternatives to fiat currencies and government-controlled financial systems. If trade tensions continue to rise without resolution, Bitcoin and other cryptocurrencies could become safe-haven assets, attracting renewed interest from global investors.

Moreover, uncertainty around supply chains and traditional financial markets may push institutions and retail investors toward decentralized assets with global liquidity.

Trump’s Latest Threats Add More Fuel

As this article was being prepared, Trump escalated matters by threatening default measures against China, citing unfulfilled aircraft purchase agreements with Boeing. He also criticized China’s role in the fentanyl crisis, accusing the country of fueling the opioid epidemic through indirect channels.

These statements mark a sharp turn from earlier suggestions of diplomatic flexibility and may widen the rift between the two nations even further. The sharp language and pointed accusations may derail any backchannel discussions that were quietly underway.

The Road Ahead

What global markets and the crypto ecosystem need now is not just words but concrete, measurable progress. If the U.S. is serious about reaching a compromise, it must move beyond signaling and begin meaningful tariff negotiations.

For the crypto market, a prolonged standoff could offer momentum, especially if traditional financial systems become more strained. As Dey There observes, the stakes have never been higher—what happens next could redefine the balance of power in both macroeconomic policy and digital finance.

Source: CryptoSlate

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Adam

Economic

Forex

Deadlines spur action.

In markets, sentiment does too.

A flurry of commentary from President Trump and Treasury Secretary Scott Bessent between Tuesday afternoon and Wednesday morning spurred a rally in the stock market.

As Yahoo Finance's Josh Schafer reported, this action signaled to some on Wall Street that the president was starting to "feel the market" as he did during his first term in office, using financial markets more like a scorecard reflecting the success of his economic policies.

For weeks now, the stock market has ebbed and flowed on one basic thing: trade-related headlines.

Wednesday's action, which saw stocks moderate gains after Bessent made further comments clarifying the administration's stance on US-China trade talks, shows this trend continues.

But the accumulation of negative information investors had digested since April 2 also helped prime the market to respond positively to this week's developments.

"Based on the daily news flow and our own client interactions, it seems that the pessimism among investors when it comes to the trajectory of US stocks has increased substantially in recent weeks," BMO's chief investment strategist Brian Belski wrote in a note to clients Wednesday.

"While we understand that it has been a challenging market environment the past few months and the scope of the recent selloff has been unsettling, it is important to note that not all market indicators are signaling further downside in the months ahead, despite what some pundits may be suggesting. In fact, some of our most tried-and-true contrarian indicators have recently plunged to excessively negative levels, which suggests to us that a solid price rebound may be on the horizon should history be any sort of guide."

In other words, tariff-related comments from Trump, among others in the administration, may be pushing the stock market around. But the stock market also needed to be in a certain place to be pushed around.

The first — and most notable, in our view — factor that Belski calls out is the massively negative trend in forward earnings revisions.

In just the last few weeks, the ratio of rising earnings forecasts compared to all forecasts being issued has plunged to around 30% for the second fiscal year out. Meaning the majority of earnings forecasts being published for the year after next are penciling in lower profits than had previously been modeled.

Given that stock prices are most influenced not by whether things are good or bad but whether they're getting better or worse, this round of negative revisions for results two years out shows a clear disintegration in optimism about the path forward.

Belski's team's work, however, shows that when this measure falls to levels seen of late, year-ahead returns for the S&P 500 have averaged over 12%. The most recent instances of this dynamic prevailing include late 2022, early 2020, and early 2016.

In Wednesday's Morning Brief, we highlighted that some of America's biggest companies are saying higher costs from tariffs will be passed on to consumers.

Reporting from Axios on Wednesday indicated executives from Walmart (WMT), Target (TGT), and Home Depot (HD) suggested as much in a visit to the White House earlier this week.

Higher costs for businesses. Higher costs for consumers. Lower profits for businesses. Lower stock prices for investors.

This is the recipe for a sentiment washout and the "substantial" increase in pessimism referenced by Belski's team. And the setup needed for the market to react to Trump's latest tariff comments with the force seen this week.

Source: yahoo

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Michelle Reid

Cryptocurrency

China has sent a stark reminder to the United States that no negotiations have commenced, characterizing the previous softening of tensions as a unilateral move. This declaration raises apprehensions among cryptocurrency holders. Concurrently, Japan is strategizing to boost imports from the U.S. as it seeks to negotiate tariff agreements with multiple nations. A pressing question on many minds remains: when will Bitcoin soar to $100,000?

Will Bitcoin Reach $100,000 Soon?

The stagnation of Bitcoin at current price points keeps alive worries about a potential dip to the $69,000-$66,000 zone. At the moment, Bitcoin hovers around $93,300, trying to recover from the recent declines triggered by tariff announcements.

What Does the Chart Indicate for Bitcoin?

Recent analyses reveal positive signs for Bitcoin. A chart shared by expert Jelle emphasizes the critical significance of the $100,000 benchmark. He stated, “Bitcoin is delivering precisely what bullish traders desire. A minor pullback solidifies the recovery at the lower price threshold, paving the way for another surge, potentially to $100,000.”

In addition, insights from Ali Martinez regarding the Bitcoin MVRV ratio suggest a possible upcoming bull rally, especially following a golden cross between the MVRV ratio and a 365-day simple moving average.

The cryptocurrency market has predominantly experienced downturns over recent months, benefiting short sellers. However, the latest uptick in Bitcoin’s price has caught many off guard, as airdrops have not met expectations, leading investors to feel that short-term gains are elusive.

Altcoin Sherpa provided his perspective on effective investment strategies, indicating that while traditional investments can yield profits, opportunities are scarce. He advised that trading-based approaches might offer greater flexibility and potential for profits, particularly in today’s turbulent market.

● China’s recent statements have alarmed cryptocurrency investors.

● Bitcoin currently struggles to maintain its value while aiming for a significant recovery.

● Market fluctuations are creating challenges for both short and long-term investors.

The outlook for Bitcoin remains uncertain, but analysts suggest that positive indicators could lead to significant price movements if the market conditions align favorably. The next few weeks will be crucial in determining Bitcoin’s trajectory.