A Stock Market Indicator Rarely Seen Since 1990 Hints at a Monster Rally. Here's What Investors Should Know.

The S&P 500 (SNPINDEX: ^GSPC) is currently 14% below the record high it reached earlier this year. The decline started when President Donald Trump announced tariffs on goods from China, Canada, and Mexico in February, and the losses deepened as he added new duties on steel, aluminum, and auto imports.However, it was the 10% universal tariff and country-specific reciprocal tariffs unveiled on April 2 that truly caused the stock market to crash. The S&P 500 tumbled 12% during the next five trading days as Wall Street processed the radical shift in U.S. trade policy. Many analysts stunned by the severity of the tariffs raised their recession risk forecasts.Stock market volatility peaked when the CBOE Volatility Index (VOLATILITYINDICES: ^VIX) reached 52.3 on April 8, one of the highest readings since January 1990. But similar readings have usually been great news for investors. The S&P 500 has usually generated monster 12-month returns following VIX readings above 50.Continue reading

Apr 19, 2025 - 09:10

A Stock Market Indicator Rarely Seen Since 1990 Hints at a Monster Rally. Here's What Investors Should Know.

The S&P 500 (SNPINDEX: ^GSPC) is currently 14% below the record high it reached earlier this year. The decline started when President Donald Trump announced tariffs on goods from China, Canada, and Mexico in February, and the losses deepened as he added new duties on steel, aluminum, and auto imports.

However, it was the 10% universal tariff and country-specific reciprocal tariffs unveiled on April 2 that truly caused the stock market to crash. The S&P 500 tumbled 12% during the next five trading days as Wall Street processed the radical shift in U.S. trade policy. Many analysts stunned by the severity of the tariffs raised their recession risk forecasts.

Stock market volatility peaked when the CBOE Volatility Index (VOLATILITYINDICES: ^VIX) reached 52.3 on April 8, one of the highest readings since January 1990. But similar readings have usually been great news for investors. The S&P 500 has usually generated monster 12-month returns following VIX readings above 50.