Historic Gains Offer Temporary Relief, But Caution Is Advised
The Nasdaq saw a dramatic 12% surge on Wednesday, marking its second-largest daily gain in history following President Trump’s announcement of a 90-day tariff pause. Strategy (MSTR), a key player in the Invesco QQQ Trust, Series 1 (QQQ) ETF, soared by 25%.
Meanwhile, the S&P 500 also saw impressive gains, climbing nearly 10% for its third-largest single-day increase—only surpassed by two other days in 2008.
Despite the impressive figures, caution is warranted. The Nasdaq’s three largest rallies took place in 2001 and 2008, both of which were during recession periods, followed by new market lows. Similarly, the S&P 500’s biggest green days also occurred in the midst of the 2008 financial crisis, a reminder of the risk of bear market rallies.
Speculation is swirling regarding President Trump’s tariff decision, with growing concerns about rising global bond yields. FOX Business Senior Correspondent Charles Gasparino has suggested that the pressure in the bond market may have been due to Japan selling bonds, not China, as initially assumed.
In the wake of the rally, the VIX (Volatility Index) dropped by a record-breaking amount, closing at 34 and registering its largest single-day percentage decline, surpassing a similar drop from 2010.
Bitcoin (BTC) experienced a brief rally, briefly climbing above $82,000. However, it remains within a downward channel that has persisted since January, signaling that the overall bearish trend may still hold.
