It felt better, but did it mean anything?
Friday’s zippy 2.1% bounce in the S&P 500
, at minimum, interrupted one of the more relentless retrenchments from a record high Wall Street had seen.
The index took a mere three weeks and a day to fall just over 10% from its peak on Feb. 19 through Thursday’s close, in its way an equal and opposite reaction to the imperturbable rally that had lifted the market to those highs.
Without reciting the entire lab report on what has the market under the weather, like most corrections this one has a composite of causes.
It starts with the pre-existing condition of a highly concentrated, expensive index riding elevated expectations for an ideal economic and policy backdrop into 2025.
An initial infection (a winter soft patch in consumer spending and a rethink of the sustainability of the AI-buildout theme) led straight to some complications: Walmart’s downbeat outlook on Feb. 20 worsened the “growth scare” while helping to kneecap the crowded momentum cohort of stocks, which included Walmart, Costco, Eli Lilly and JP Morgan, along with Nvidia, Meta Platforms and the like.
Finally, the medication for the top-heavy market – rotation into value and overseas stocks – had the side effect of swamping the index due to the enormous size of stocks being sold versus those being bought.
And, yes, the erratic declarations of escalating tariffs and haphazard cuts in government employment have generated a near-constant barrage of “tape bombs” to keep traders off balance.
Source: https://www.cnbc.com/2025/03/15/after-such-a-relentless-market-correction-the-relief-rally-faces-a-high-burden-of-proof-.html