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U.S. Stock Market Breaks Records, but History Points to Bearish Signals
Historic gains offer short-term relief, but market patterns signal caution ahead.
Updated Apr 10, 2025, 9:53 a.m. Published Apr 10, 2025, 9:38 a.m.
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What to know:
- Rallies of this magnitude often occur during economic downturns, as seen in 2001 and 2008—preceding further market declines.
- Volatility and global bond pressure remain high, with the VIX posting a record drop and concerns shifting from China to Japan’s bond activity.
The Nasdaq closed 12% higher on Wednesday, marking its second-largest gain in history, following President Trump's decision to pause the implementation of tariffs for 90 days. Strategy (MSTR), one of the fastest-recovering stocks and a component of the Invesco QQQ Trust, Series 1 (QQQ) ETF, surged 25%.
Meanwhile, the S&P 500 climbed nearly 10%, recording its third-largest single-day gain—surpassed only by two days in 2008.
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While this may seem bullish on the surface, it’s worth noting that the Nasdaq’s three biggest rallies occurred in 2001 and 2008—both during recessions and followed by new lows. Similarly, the S&P 500’s two larger green days were also during the 2008 financial crisis. Investors should be aware of bear market rallies.
There’s growing speculation about why Trump backed off on tariffs. Globally, rising bond yields were rattling markets. According to FOX Business Senior Correspondent Charles Gasparino, the pressure in the bond market may have stemmed from Japan selling bonds—not China, as many had assumed.
As the market rallied, the VIX (Volatility Index) closed at 34, registering the largest one-day percentage drop in its history, surpassing the 2010 record.
Bitcoin also saw a spike, briefly rallying above $82,000. However, it remains within the downward channel it has followed since January.
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Bitcoin could fall to $10,000 as U.S. recession risk builds, Mike McGlone says
McGlone links bitcoin’s downturn to record U.S. market cap-to-GDP levels, low equity volatility and rising gold prices, warning of potential contagion into stocks.
What to know:
- Bloomberg Intelligence strategist Mike McGlone warns that collapsing crypto prices and a potential bitcoin slide toward $10,000 could signal mounting financial stress and foreshadow a U.S. recession.
- McGlone argues the post-2008 "buy the dip" era may be ending as crypto weakens, stock market valuations sit near century highs relative to GDP, and equity volatility remains unusually low.
- Market analyst Jason Fernandes counters that a drop to $10,000 bitcoin would likely require a severe systemic shock and recession, calling such an outcome a low-probability tail risk compared with a milder reset or consolidation.
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