US stock market hits new records, but historical data points to bearish signals
Historical gains provide temporary relief, but market trends warn of the need for caution.
James Van Straten | Edited by Parikshit Mishra Updated April 10, 2025, 9:53 AM Published April 10, 2025, 9:38 AM
What is important to know:
- Price rises of this magnitude are often seen during economic downturns, as happened in 2001 and 2008, and usually precede further market declines.
- Volatility and pressure on global bond markets remain high, with the VIX posting a record drop and concerns shifting from the Chinese bond market to the Japanese one.
The Nasdaq closed up 12% on Wednesday, its second-biggest gain in history, after President Trump announced a 90-day tariff suspension. Strategy (MSTR), one of the fastest recoveries and a component of the Invesco QQQ Trust, Series 1 (QQQ) ETF, rose 25%.
At the same time, the S&P 500 index rose nearly 10%, recording its third-largest one-day gain, surpassed by just two days in 2008.
While this may seem encouraging at first glance, it’s worth remembering that the Nasdaq’s three biggest rallies occurred in 2001 and 2008 — both periods came during recessions and were followed by new lows. Likewise, two significant green days for the S&P 500 also occurred during the 2008 financial crisis. Investors should be wary of bear market rallies.
Speculation is mounting about why Trump backed away from tariffs. Around the world, rising bond yields have rattled markets. As FOX Business senior correspondent Charles Gasparino reports, the pressure on bond markets may have come from Japanese bond sales, not China as many thought.
As the market rose, the VIX volatility index closed at 34, recording its biggest one-day percentage drop ever, surpassing the 2010 record.
Bitcoin (BTC) also saw a surge, briefly rising above $82,000. However, it remains within the downward channel that has been in place since January.
