S&P 500 Stages Rebound After $5 Trillion Plunge

Although a stock market rebound eased equities investors’ anxiety, the consequences of Donald Trump’s political scheming shook international markets and unnerved US consumers. As government officials agreed on an immense defense spending plan, German bond yields jumped, and gold, the ultimate refuge asset, crossed $3,000 for the first time.

The most significant increase in the S&P 500 since the aftermath of the November presidential election was 2.1%. After a selloff that resulted in a 10% decline in the US stock benchmark from its top, the market recovered despite statistics indicating a decline in consumer confidence. Treasuries fell along with their German counterparts as the safety bid weakened. After rising as much as 0.5% to $3,004.94 an ounce, bullion reversed gains.

The actions ended a week filled with drama, including Trump’s intermittent tariffs, demands for a recession, geopolitical discussions, and worries of a government shutdown in the United States. Global equity funds suffered their most significant withdrawal this year due to the scrutiny surrounding high-tech valuations, and mood indicators became gloomy, which is a good indication from a contrarian standpoint.

“Scared-cat bounce?” asked Ed Yardeni, the man behind his research company. “The market does well any day when there are no remarks about Trump’s tariffs. Relieved that there won’t be a government shutdown, the market is also rising. When the stock market rises on a day or days when Trump continues to threaten tariffs, we will be more likely to declare a bottom.

Despite Friday’s gain, the S&P 500 recorded losses for the fourth consecutive week, the longest since August. Friday’s advances were led by tech megacaps, with Tesla Inc. and Nvidia Corp. rising at least 3.8%. The Nasdaq 100 increased by 2.5 percent. 1.7% was added to the Dow Jones Industrial Average.

At 4.31%, the yield on 10-year Treasuries increased five basis points. The dollar gauge dropped by 0.2%.

Craig Johnson of Piper Sandler pointed out that although stocks have been affected by bad stories and sentiment, markets may see a 3% to 6% recovery rally in the upcoming weeks or months.

“At Janney Montgomery Scott, we are witnessing some oversold rally efforts once more,” Dan Wantrobski stated. “But we warn those who want to jump back in at the first indication of stability here: almost everyone is searching for a bottom and will eventually “buy the dip,” but the state of the markets has not technically indicated any significant improvement at this time; the tape is just extremely oversold.”

“Is the worst over?” is a question that Andrew Brenner of NatAlliance Securities says he receives many times a day. “We’re not sure. Brenner stated, “The seasonals are beginning to turn, but we want to see a capitulation trade.” “For equity seasonals, the end of February to the middle of March is a terrible time.”

Following a selloff that reduced the value of the S&P 500 by around $5 trillion, stocks rose on Friday. US equities fell into a slump in just 16 trading sessions, leaving a bewildered Wall Street wondering how long the “adjustment period” that White House officials have warned about will remain.

According to statistics from CFRA Research, it has taken an average of eight months to recover an all-time high in the last 24 cases, where equities have dropped at least 10% from a record but have escaped a bear market. The peak from February 19 would remain intact until the middle of October. In those circumstances, the average drawdown was 14%.

According to Mark Hackett of Nationwide, “Corrections are unsettling at the moment, though they are not unusual, and often act as a pressure release valve for overheated markets.” “Yes, a degree of caution is justified, and this will not be the bulls’ only correction, pullback, or market scare.”

According to Ross Mayfield of Baird Private Wealth Management, whether a recession ensues often separates shorter (and frequently beneficial) selloffs from protracted bear markets.

He says the average drawdown in the 23 non-recession corrections since 1965 has been 16%. In the meantime, the average drawdown from the eight recession selloffs during that time was 36%.

He said, “The good news is that a near-term recession still looks unlikely despite headwinds.” Among the main market movements are:

Stocks

• As of 4 p.m., the S&P 500 had up 2.1%. Time in New York
• It increased by 2.5 percent.
• The 1.7% increase in the Dow Jones Industrial Average
• The MSCI Global Index increased by 1.8%.
• The Magnificent 7 Total Return Index from Bloomberg increased by 2.8%.
• The 2.5% increase in the Russell 2000 Index

Currencies

• The Bloomberg Dollar Spot Index had a 0.2% decline.
• At $1.0883, the euro increased by 0.3%.
• At $1.2935, the British pound dropped 0.1%.
• The value of the Japanese yen dropped 0.6% to 148.63 USD.

Cryptocurrencies

• Bitcoin reached $84,522.26, up 5.2%.
• Ether increased to $1,934.54 (5%).

Bonds

• Ten-year Treasuries’ yield increased five basis points to 4.31%.
• The 10-year yield in Germany increased by two basis points to 2.88%.
• The 10-year yield in Britain dropped one basis point to 4.67%.

Commodities

• At $67.14 a barrel, West Texas Intermediate crude increased 0.9%.
• The price of spot gold dropped 0.2% to $2,984.06 per ounce.