Witnessing History: Rebound or Reversal? How High Can Market Go?
The US stock market just delivered one of its most astonishing sessions in history. Following President Trump’s announcement of a 90-day tariff suspension for countries that refrain from retaliatory measures, all three major indexes surged. The Nasdaq led the charge with a jaw-dropping 12% gain — marking the second-largest single-day jump in its history.
At the same time, the Fear Index $Cboe Volatility Index(VIX)$ recorded its largest single-day drop ever, plummeting 35.75%.
The biggest question is: Was this just a rebound or a reversal?
Analysts believe it's just a rebound.
Director of The Wealth Alliance said,
We’re living minute by minute right now. A lot of panicked investors are desperately trying to latch onto something positive. But I don’t think this is the bottom.
Founder of Tallbacken Capital Advisors, added,
“The two-way volatility is wild, but not unusual in a bear market. It doesn’t signal a bottom.”
Analysts at Tiger Brokers believed,
This is likely a technical rebound rather than the start of a sustained rally. Mid-term risks remain. Even with tariff relief for some, the 10% tariffs still affecting other countries could significantly impact the US economy.
Every US bear market has featured “big rallies” like the one we just witnessed.
Statistically, some of the best-performing days in stock market history have occurred during bear markets.
Of the Nasdaq’s top 25 trading days, 22 happened during periods of crisis: the dot-com bust, the 2008–09 financial meltdown, or early COVID days.
During the 2008 financial crisis, two of Nasdaq’s best-ever trading days happened in October.
How long will this rebound last? Could it still turn into a recession?
The US–China standoff will likely continue, but in the short term, US stocks appear poised for further gains.
The VIX remains elevated (above 30), but without new major risks emerging, "shorting volatility" could drive the VIX down and further lift markets. Watching the VIX drop into the 20s could be a sign the rebound is losing steam.
Mag 7 like $Tesla Motors(TSLA)$ closed at $272.2, a key level at $275 or the next target $300. $NVIDIA(NVDA)$ eyes key levels at $115 or $120.
One Wild Card: Trump
Whether or not a recession materializes may ultimately depend on Trump. Unlike previous major downturns (1987, 2000–01, 2008, and 2020), many investors believe this recession is still avoidable — and could even be reversed depending on presidential decisions.
How do you view yesterday’s epic surge?
Is it a dead cat bounce or reversal?
Would you keep hold Mag 7 or sell at every rebound?
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What it means is that the every day Americans will have to pay that extra tariff on the goods they buy, which may result in higher inflation.
Then there is 10% Tariff across the board levied on other countries. Everything imported to the US will be expensive for the Americans.
If this punitive tariff is not lifted, there maybe recession. No one wins in this trade war!
@Tiger_comments @TigerStars @Tiger_SG @CaptainTiger @TigerClub
You must have a strong heart to sustain such volatility or getting into roller coaster. Hence, there is always a signboard before boarding the roller coaster. Please do not get onto the roller coaster ride if you have heart issue ie weak heart. 🫀🫀.
@Wayneqq @melson @HelenJanet @MHh
But either way, the rally brought us back to where we were prior to the tariffs, which doesn't make sense, since we still have 10% tariffs on the whole world, plus whatever rate China is at. Today's pullback brings it to a more sensible level, but I'm still bearish.
I’m still holding my Mag 7 positions, but with a cautious mindset. Instead of chasing the rally, I’m using moments of strength to trim or rebalance. These kinds of sharp bounces can be tempting, but staying disciplined is key. I’d rather protect gains than assume the bottom is in without real fundamental improvements.
This market remains headline-driven, and Trump is playing a major role in sentiment. His decisions can easily flip the mood overnight. Until there’s more stability in policy & economic data, I’m treating this rally as part of a volatile range.
@Tiger_comments @TigerStars