While the U.S. Stock Market Hits New Highs, Historical Data Points to Possible Bearish Conditions.

Temporary Relief for Markets, But Caution Still Required

On Wednesday, the Nasdaq surged by 12%, marking its second-largest one-day gain ever, following President Trump’s announcement of a 90-day pause on tariffs. Strategy (MSTR), part of the Invesco QQQ Trust (QQQ), saw a remarkable 25% increase.

The S&P 500 also posted a strong performance, climbing nearly 10%, ranking as its third-largest single-day gain, only surpassed by two days in 2008.

While these gains may seem encouraging, it’s important to remember that such rallies often occur during bear markets. The Nasdaq’s three largest rallies in history took place in 2001 and 2008, both during recessions, and were followed by new market lows. Similarly, the S&P 500’s biggest green days happened amidst the 2008 financial crisis, highlighting the risk of bear market rallies.

Speculation has been rising around Trump’s decision to pause tariffs, with reports indicating global bond yields were contributing to market jitters. FOX Business Senior Correspondent Charles Gasparino suggested Japan’s bond sales, rather than China’s actions, could be at the root of market pressure.

In response to the market rally, the VIX (Volatility Index) dropped to 34, experiencing its largest one-day percentage decline in history, surpassing the previous record set in 2010.

Bitcoin (BTC) also enjoyed a rally, briefly climbing above $82,000, but remains confined within a downward channel that has persisted since January. This suggests that the bearish trend could still dominate the market despite the short-term optimism.