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Will the S&P 500 rebound in April after its worst monthly drop since 2022?

by April 1, 2025
by April 1, 2025

US stocks are ending March with a decline they haven’t seen in a single month since September of 2022 as the White House continues to stir uncertainty for global investors.

Fears of Trump’s tariffs leading to trade tensions and even a recession eventually pushed the S&P 500 index into the correction territory this month.

However, the benchmark is positioned for some relief in April, according to Ari Wald. He’s a senior technical strategist at Oppenheimer.

History says the S&P 500 will gain in April

Trump’s trade policies triggered a massive sell-off in the US tech stocks this month that ultimately saw the S&P 500 tank below its 200-day MA.

Historically, the benchmark index ends up recovering in April when it starts the month below that long-term moving average, the Oppenheimer strategist argued in his latest report.  

Ari Wald analyzed data for the past 75 years to conclude that SPX tends to gain about 2.5% on average in April when the aforementioned conditions are met.  

Plus, the implementation of new tariffs on April 2 (Liberation Day) could at least offer some certainty, which may also help US stocks inch up a little in the coming months.

Note that the benchmark S&P 500 index is currently down more than 8% versus its year-to-date high.   

Long-term remains foggy for the S&P 500

While the Oppenheimer strategist signaled potential for a near-term bounce in the S&P 500, he remains cautious on US stocks for the longer term.

Ari Wald agreed that a potential recovery in the benchmark index in April could prove short-lived, adding,“investors buying the current sell-off should be keying on relative strength and thinking in terms of long-term accumulation.”

Among the names that Oppenheimer calls “favourites” heading into April are giants like Costco that stand to benefit from its “unique and improving consumer value proposition” amidst a potential recession.

A 0.49% dividend yield makes COST all the more attractive to own at current levels.

Goldman Sachs lowers S&P 500 target again

Goldman Sachs agrees with Wald’s longer-term view on the S&P 500. The investment firm trimmed its year-end target on the benchmark index again to a Street-low on Monday.

Its chief of US equity strategy, David Kostin, now expects SPX to remain capped at 5,700 in 2025, which indicates potential for a little over 1.0% gain only from current levels.

“These estimates incorporate downward revisions to earnings growth and valuations, reflecting a weaker base case economic growth backdrop, higher uncertainty, and higher recession risk,” he told clients in a recent note.

Note that Goldman Sachs had already lowered its year-end target on the S&P 500 index earlier in March from 6,500 to the 6,200 level. So, today’s cut to 5,700 marked the second time it has trimmed the target on SPX.

The post Will the S&P 500 rebound in April after its worst monthly drop since 2022? appeared first on Invezz

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