Wall Street: "Worst Phase of Stock Sell-Off Over... Market Rally Soon"

S&P 500 Drops Over 10% Due to Tariff Policies
Trump’s Remarks on Tariff Exemptions Trigger Market Rebound
Analysts Advise Caution on Timing for Bargain Buying

As major U.S. stock indices, which had been declining due to President Donald Trump's tariff policies, rebounded, analysts on Wall Street suggested that the selling pressure has eased.

According to Bloomberg on the 25th (local time), strategists from JP Morgan Chase, Morgan Stanley, and Evercore ISI presented to their clients that the worst phase of recent stock sell-offs seems to be over, based on indicators such as market sentiment, investment positions, and seasonality.

Amid growing concerns over economic uncertainty caused by tariff policies, the S&P 500 index, which is centered on large-cap stocks, fell 10.1% from its peak on the 19th of last month to the 13th of this month, spanning 16 trading days. During this period, market capitalization lost more than $5.6 trillion. Since then, the S&P 500 index fluctuated but rose 1.76% on the 24th. President Trump’s remarks that some countries might be exempted from tariffs related to the mutual tariffs scheduled to be announced on April 2nd stimulated investor sentiment.

JP Morgan strategists Dubravko Lakos-Bujas and others noted that the recent sharp decline has cleared out accumulated positions, stating, "As a result, the risk of another rapid position adjustment occurring in the short term is low."

Morgan Stanley’s Michael Wilson also predicted an imminent market rally, citing factors such as seasonality, a weaker dollar, movements in U.S. Treasury yields, and excessive market pessimism.

Evercore’s Chief Strategist Julian Emanuel said that although market sentiment is very negative due to remarks from Trump administration officials, "the two steps back we experienced are in the process of being resolved, and there is a high likelihood of three steps forward at higher prices."

However, experts remain cautious about whether now is the right time for bargain buying, considering uncertainties around tariffs and concerns about a potential artificial intelligence (AI) bubble. Dennis Debusschere, Chief Strategist at 22V Research, said, "Assuming tariffs do not become a major headwind to growth, the index will rebound throughout 2025," but added, "We cannot be certain that tariffs will not lead to seriously negative outcomes. Therefore, we will wait until the April 2nd announcement to present a long-term perspective."