S&P 500 Struggles Amid Deepening Market Turmoil 

Markets are facing renewed turbulence as President Trump’s escalating trade war with China sends shockwaves through global equities. After a fleeting rebound midweek, sentiment has quickly reversed, with sharp declines in major US indices and heightened concerns over policy uncertainty, inflation risks, and the potential for recession. Despite brief moments of relief, both historical patterns and technical signals suggest the path to recovery remains steep. 

This report outlines the latest market developments and analyzes the S&P 500’s technical setup as investors navigate ongoing volatility. 

Stocks Sink as Trump’s Tariff Shock Deepens Trade Turmoil 

US stocks tumbled on Thursday, April 10, 2025, as President Trump’s escalating trade war with China rattled markets. The S&P 500 fell 3.5%, the Dow dropped 2.5%, and the Nasdaq slid 4.3%, erasing much of Wednesday’s gains. Losses accelerated after the White House clarified that Chinese imports would be taxed at 145%, not 125% as initially suggested. China responded with new countermeasures, including limiting US film imports. Bond yields swung sharply, and oil prices fell over 3%. Amid heightened volatility, Wall Street remains on edge as trade uncertainty and recession fears deepen. 

Rally on Thin Ice: History and Fed Reluctance Dim S&P 500’s Recovery Hopes 

Despite Wednesday’s sharp rebound in US stocks, historical trends suggest a low probability that the S&P 500 will end the year in positive territory after a 15%+ drop. Only three recoveries—1982, 2009, and 2020—were supported by aggressive Federal Reserve interventions, which are unlikely this year amid inflation concerns. With the Fed hesitant to ease policy and Trump’s escalating tariffs threatening growth and stoking cost pressures, Wall Street remains skeptical of a sustained recovery. Analysts warn that continued trade uncertainty, weak economic data, and stagnant earnings could keep equities under pressure. 

Wednesday’s S&P 500 Winners Still Deep in the Red 

The S&P 500 jumped 9.5% on Wednesday after President Trump paused new tariffs for 90 days, sparking a broad market rebound. All but nine S&P 500 stocks gained, with tech and travel names leading the surge. However, most top performers remain deep in the red for 2025, and many are still below their 2021 levels. Despite the rally, two-thirds of the index remains down for the year, highlighting how far many stocks still have to climb to fully recover. 

Technical Analysis 

Since reaching a peak of 6,149.50 on February 19, the S&P 500 Index has established a clear pattern of lower highs and lower lows—signaling the development of a sustained bearish trend. This downside structure is reinforced by the downward-sloping 20- and 50-period Exponential Moving Averages (EMAs), with price action consistently trading below both indicators. 

Momentum studies further validate the bearish bias. The Momentum Oscillator remains anchored below the 100 threshold, while the Relative Strength Index (RSI) continues to hold beneath the neutral 50 mark—both indicative of persistent negative momentum and subdued buying interest. 

Should the current trend continue, the next potential downside targets lie at 4,800.73, 4,584.15, and 4,130.66. However, if a shift in sentiment occurs and bullish momentum reemerges, resistance may be encountered at 5,276.06, followed by 5,506.57 and 5,967.97. 

Conclusion 

With market sentiment shaken by escalating trade tensions and limited support from monetary policy, the S&P 500 faces a challenging road ahead. Technical indicators reinforce the bearish outlook, while macro uncertainty continues to weigh heavily on risk appetite. Unless clarity emerges on trade policy or economic data shows meaningful improvement, volatility is likely to persist—and the prospect of a sustained recovery may remain elusive in the near term.