New Bull Run or Bear-Market Rally? Only Time Will Tell

Don't be fooled by Wednesday's market turnaround, which saw the S&P 500 equities benchmark climbing by the most since 2008 and significant gains in bitcoin (BTC) and the broader crypto market, as represented by the CoinDesk 20 (CD20) index.

The rally, sparked by President Donald Trump's announcement of a 90-day pause on tariffs, fueled social-media optimism of an imminent prolonged bull run in both stocks and crypto. That may be overoptimistic, according to analysts at Goldman Sachs and elsewhere, who note that multiweek, double-digit equity price rallies are quite common even during larger bear markets.

“In most bear markets, given light positioning, marginal changes in these variables can have amplified effects on markets. As a result, bear market rallies are quite common,” Goldman’s strategy team led by Peter Oppenheimer said in a Tuesday note titled “Bear Market Anatomy – the path and shape of the bear market.

There have been 19 global bear market rallies since the 1980s and on an average, “they have lasted 44 days and the MSCI AC World return is 10% to 15%,” the note said.

“One of the worst bear markets of history saw about half a dozen major double-digit rallies before all was said and done,” Callum Thomas, founder and head of research at Topdown Charts, said on X referring to the 1930s. “Is the 90-day bounce a BMR?”

Whether the recent bounce signifies the onset of a new bull run or merely a bear market rally won't become clear until later. However, certain characteristics of a sustained bottom mentioned by Goldman such as attractive valuations, extreme negative positioning, policy intervention and a slowdown in macroeconomic deterioration, are not yet evident.

The Federal Reserve is unlikely to offer support any time soon, while Trump has only halted tariffs for 90 days, meaning trade tensions could escalate again. Plus, tariffs on China continue to rise and if that’s not enough, stocks are not cheap yet.