The market carnage extended for a fourth straight week, dragged down by investors wrestling with a flip-flopping tariffs policy and intensifying recession fears. This week, the S&P 500 tumbled 2.3% and the Nasdaq Composite fell 2.4%. Both sharply rebounded Friday but failed to exit correction territory—defined as a drop of 10% or more from a recent high.
While there is pain, Fundstrat Head of Technical Strategy Mark Newton reminded investors that the declines are in line with what is historically noted during the first quarter of any new administration. Besides, it was a mere 17 trading days ago that the S&P 500 set a fresh all-time high, he pointed out.
“The economy arguably is still in very good shape, the earnings picture is good—even as fear levels are higher,” Newton said during the weekly huddle. “I don’t think we can jump to conclusions and talk ‘recession’ just based on these declines.”
Stocks’ “dire” situation is not shared by bonds, Head of Research Tom Lee said. Sure, Treasury Secretary Scott Bessent said that there is no Trump put for stocks, but “there may be one on the economy,” meaning that the White House could be forced to turn around its policies if it sees the economy deteriorate too much, Lee highlighted.
The bond market is also pricing in odds of 3.4 interest-rate cuts from the Federal Reserve this year, up from 1.5 previously, he said. The divergence between stocks and bonds has historically been a “pretty good entry point for stocks,” said Lee, citing data from Renaissance Macro Research.
On the technical side, Newton has been encouraged to see stocks down to the same levels of oversold territory as the ones that coincided with bottoms seen in August and April of 2024. “People are disgruntled, but we’re certainly not seeing evidence of true fear,” he said.
He expects that lows to this sell-off could be “achieved within the next two weeks from a timing perspective, and prices are nearing possible support.”

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Putting the recent declines into perspective, Fundstrat Head of Research Tom Lee said that the 10% correction noted in the S&P 500 is the fifth-fastest in the past three quarters of a century, taking 20 days. The median gain from all prior declines was 21% over the next 12 months. The quickest was from the Covid decline, prompting Lee to say, “Is this worse than the global pandemic? I don’t think so.”
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- I would put >50% probability that a deal with one of those 2 countries is announced within the next 2 weeks
This would end talk of “White House wants a recession” Stay the course