S&P 500’s Rollercoaster Ride: Is the Bottom Finally Here?
The stock market has been on a wild ride lately, leaving investors wondering: How much lower can the S&P 500 go? And more importantly, have we already hit rock bottom?
Recent Market Performance
The S&P 500 has had an impressive run over the past couple of years:
- A 23.3% gain in 2024
- A 24.2% rise in 2023
- Reached an all-time high of 6,144.15 on February 19, 2025
- Climbed 36.4% from its October 2023 low
- Since the February peak, it has dropped about 8.7%
On Monday, the index hit a low of 5,565 but rebounded slightly, closing 2.7% lower for the day. Tuesday’s trading could give a clearer picture of whether the market is stabilizing or if more turbulence is ahead.
A Look at Market History
This isn’t the first time we’ve seen sharp market reversals. Two major selloffs happened during Trump’s first term:
- 2018 Trade War with China: The S&P 500 peaked at 2,940 in September but dropped 20% by December due to escalating tariffs between the U.S. and China. After a trade deal was reached, the index bounced back with an 8% gain in January 2019.
- COVID-19 Crash & Recovery: In early 2020, the market fell by a third due to the pandemic. However, as vaccines rolled out in April, the S&P 500 surged 12.7% that month and climbed 53% by the end of the year.
Are There Signs of a Rebound?
Investors often look at the Relative Strength Index (RSI) to gauge market conditions. The RSI measures how quickly a stock or index is moving:
- Below 30 = oversold (potential for a rebound)
- Above 70 = overbought (risk of a selloff)
On Monday, the S&P 500’s RSI dipped to 29.92, signaling oversold territory but not an extreme low. Tesla’s RSI, for example, hit 20.59, hinting that a recovery could be near for the stock.
What’s Next for the Market?
Late Monday, Delta Air Lines slashed its earnings forecast, citing economic uncertainty. Its stock dropped 5.5% after hours, reflecting broader concerns about consumer confidence.
Futures trading suggests a mixed opening for Tuesday, with the Dow and S&P 500 likely to open higher, while the Nasdaq-100 may still face pressure.
With market signals flashing mixed messages, all eyes will be on the coming trading sessions to see if the worst is behind us or if there’s more turbulence ahead.
