From Panic to (Almost) a Full Recovery - In Just Weeks

Since March 1st, we’ve all been on a wild ride in the markets. Some are calling it the 'Tariff Tantrum' - which I think will stick.

Looking at the S&P 500, Nasdaq 100, the All Country World Index, and Russell 2000 ETFs, it’s been a roller coaster: a lightning-fast down market that saw the S&P 500 drop nearly 19% from February highs… and then a massive rally almost all the way back.

So, what sparked one of the fastest comebacks in recent memory, and why should you care?

So What Fueled the Recovery?

1. Strong Corporate Earnings Earnings season helped rescue the market. As of last week, earnings per share growth for the S&P 500 was 12.1% year-over-year, with 75% of companies beating expectations, nearly in line with the 5-year average. In short: stocks got cheaper in March and April, but corporate profits held steady. That’s a recipe for a bounce.

2. AI Theme Still Driving Growth Tech giants Microsoft, Meta, Amazon, Alphabet didn’t just report solid earnings. They doubled down on AI investment. Despite market noise, the long-term growth narrative around artificial intelligence stayed intact, helping to lift sentiment and stock prices.

3. Trade Tensions Cooling We didn’t get major trade deals, but the rhetoric softened. A UK deal was signed, talks with China are warming, and the market began to shrug off Trump-era tariff threats. In short: the tone shifted, and that was enough.

4. Labor Market Holding Strong April job numbers surprised to the upside. While some spending categories cooled (like travel), there was no evidence of widespread layoffs. Bank CEOs and card data confirmed: the consumer is still standing.

5. Sentiment Hit Rock Bottom Fast Investor sentiment collapsed in early April to levels we haven’t seen since 2008. The VIX spiked, confidence tanked, and everyone braced for disaster. Ironically, that extreme pessimism is often what sets the stage for a turnaround and that’s exactly what happened.

6. Retail Investors Rushed In While strategists lowered year-end targets and warned of bear traps, younger investors poured into the market buying ETFs, tech stocks, and even Bitcoin. To them, the long-term opportunity outweighed the short-term headlines. That optimism helped fuel the rally.

So… Are We Out of the Woods?

Not necessarily. While the rally has been impressive, we’re still navigating economic uncertainty, geopolitical risk, and shifting policy. But that’s always the case, isn’t it?

The bigger lesson is this:

Markets can recover fast. Really fast. And if you’re sitting in cash, waiting for the “all clear,” you might miss the move when it comes.

Trying to time the market is nearly impossible. There will always be smart voices on both sides making compelling cases. The key is to have a process, not a prediction and to remember that your investment timeline doesn’t need to match the news cycle.

If you’re feeling uncertain or want to revisit your current strategy, let’s have that conversation.

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