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Dow Drops Nearly 900 Points as S&P 500 Nears Correction U.S. stock markets endured their worst session of 2025 on Monday, as investor fears of a potential recession intensified. The Trump administration’s attempts to reassure markets fell flat, raising the prospect of further selloffs and a possible bear market for the Nasdaq Composite Index. The Nasdaq Composite suffered the steepest losses, plunging 727.90 points, or 4%, to close at 17,468.32—its lowest level since September 11, 2024. This marked its biggest percentage drop since September 13, 2022. Having already entered correction territory last week with a 10% decline from its peak, the index is now down 13.4% from its record close of 20,173.89 on December 16. The Dow Jones Industrial Average tumbled 890.01 points, or 2.1%, to settle at 41,911.71, after dipping as much as 1,189 points intraday. The S&P 500 also saw a sharp decline, falling 155.64 points, or 2.7%, to close at 5,614.56, putting it 8.6% below its record close of 6,144.15 from February 19. Market analysts anticipate further downside. “This selloff may not be over,” warned Peter Cardillo, chief market economist at Spartan Capital Securities. He pointed out that with the Nasdaq in correction mode and the S&P 500 teetering on the edge, continued selling pressure is likely. “Is a bear market next? The risk for the Nasdaq is growing,” he added. President Donald Trump attempted to calm markets over the weekend, downplaying the effects of his administration’s tariff policies in a Fox News interview. However, he acknowledged that a recession in 2025 was a possibility. White House economic adviser Kevin Hassett sought to reassure investors in a CNBC interview on Monday, but market reaction suggested that confidence remained shaky. “The market is sending a strong message,” Cardillo stated, highlighting that bond markets were signaling recession fears. Treasury yields, which move inversely to bond prices, continued to decline, reflecting expectations that the Federal Reserve may need to cut interest rates to stabilize the economy. Tom Essaye, founder of Sevens Report Research, attributed the selloff to mounting uncertainty over tariffs, the looming debt ceiling fight, and discussions on extending Trump-era tax cuts. He warned that hesitation from businesses and consumers amid this uncertainty could slow economic growth and weaken corporate earnings. While fear is driving market sentiment, Essaye emphasized that “the data itself hasn’t turned negative yet.” Corporate earnings remain solid, and analysts have not yet made sweeping downward revisions to estimates. However, with the S&P 500 still trading at over 21 times expected earnings, the index remains vulnerable to further declines. The 10-year Treasury yield, now at 4.212%, has dropped from its recent 4.8% peak as inflation concerns give way to economic slowdown fears. Although Fed Chair Jerome Powell recently described the economy as “in good shape,” escalating trade tensions have darkened the outlook. This has fueled speculation that the Federal Reserve may reconsider its cautious stance on rate cuts in 2025. “The market has shifted from optimism to anxiety in a matter of weeks,” noted Gennadiy Goldberg, head of U.S. rates strategy at TD Securities USA. Investors now face a range of uncertainties—not only regarding Trump’s trade policies and economic approach but also the threat of a government shutdown if Congress fails to pass a budget deal by Friday. “The bond market’s main concern is slowing economic growth, compounded by trade and fiscal uncertainty,” Goldberg told MarketWatch. As volatility grips Wall Street, all eyes are on upcoming economic data and Federal Reserve decisions, as investors brace for what could be an extended period of market turbulence. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

DoorDash is among four companies set to join the S&P 500, while AppLovin and Coinbase were not selected. The committee responsible for choosing S&P 500 components exercises discretion in its selections, and this time, it appears to have prioritized stability over volatility. S&P Dow Jones Indices announced Friday that four companies will be added to the index later this month. DoorDash Inc. (DASH) is the largest of the new entrants, joining TKO Group Holdings Inc. (TKO), Williams-Sonoma Inc. (WSM), and Expand Energy Corp. (EXE). The S&P 500 consists of some of the largest U.S. companies by market capitalization, but inclusion is based on more than size alone. Companies must meet criteria related to profitability, public float, and other factors. Additionally, the selection committee considers aspects like sector diversification and stock volatility. While DoorDash met the eligibility requirements, it was not the largest company considered. AppLovin Corp. (APP) and Interactive Brokers Group Inc. (IBKR) both have larger market caps but were not chosen. Notably, the committee did not introduce any new technology companies to the S&P 500 in this round. Though DoorDash operates in the tech-driven food-delivery space, it is classified as a consumer-discretionary company. It may have been viewed as a more stable option than AppLovin, which recently came under scrutiny following two short-seller reports. AppLovin’s stock surged more than 700% in 2024 but has declined early in 2025. By contrast, DoorDash shares rose 70% last year and have continued climbing. The company recently qualified for S&P 500 inclusion after meeting profitability requirements. Coinbase Global Inc. (COIN), though smaller than DoorDash, was another widely discussed candidate that was ultimately left out. As a cryptocurrency exchange, Coinbase operates in an industry subject to a rapidly evolving regulatory landscape. Its stock has surged over 500% since the end of 2022, but its volatility may have factored into the committee’s decision. Historically, stocks that experience rapid gains ahead of S&P 500 inclusion often face volatility. Super Micro Computer Inc. (SMCI), added in March 2024, has seen its stock price decline by more than half since its inclusion, weighed down by financial control concerns and increasing competition in the server market. The company’s stock remains one of the most volatile in the index. Bernstein analysts have noted that while new entrants tend to outperform the S&P 500 in the year leading up to their addition, their relative returns tend to diminish shortly after the announcement. Stocks typically see an immediate boost after being named as future S&P 500 constituents, as index-tracking funds must purchase shares of the new entrants. This was evident in Friday’s extended trading session, where DoorDash shares climbed 6%, TKO gained 2.4%, Williams-Sonoma rose 1.6%, and Expand Energy advanced 2.3%. Conversely, stocks of companies that were not selected saw declines. AppLovin dropped 4.3%, Interactive Brokers fell 2.6%, and Coinbase slipped 2.1% in after-hours trading. The four new S&P 500 entrants will replace BorgWarner Inc. (BWA), Teleflex Inc. (TFX), Celanese Corp. (CE), and FMC Corp. (FMC) before trading begins on March 24. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

The bulls are starting to sweat. JPMorgan bullish stance has always been measured, and now cracks are beginning to show. After parting ways with Marko Kolanovic due to his unfulfilled bearish forecasts, the bank’s new team, led by Dubravko Lakos-Bujas, set a conservative S&P 500 year-end target of 6,500 — a forecast that sits in the middle of Wall Street projections. Achieving that target would require a 13% surge from current levels, following Thursday’s 1.8% drop that left the index at 5,738.52. “We are sticking with our 6,500 target for year-end but acknowledge significant uncertainty, with the possibility that this level may not be reached until 2026,” the strategists noted. They anticipate the index will trade between 5,200 and 6,000 in the near term before rallying later in the year. Despite recent turbulence, JPMorgan sees minimal recession risk. The strategists believe markets are recalibrating to policy-driven growth concerns, with falling interest rates, oil prices, and a weaker U.S. dollar offering support for risk assets. Lower borrowing costs could unleash pent-up demand in sectors like housing, retail, and autos. The 10-year Treasury yield has dropped nearly 30 basis points this year, oil prices are down 7%, and the U.S. dollar index has slid 4% in 2025. Markets are pricing in nearly three Federal Reserve rate cuts this year, with the potential for additional cuts if economic conditions deteriorate. Policy easing would align with the Treasury secretary’s objective to lower rates, stimulate growth without stoking inflation, and narrow the budget deficit. Additionally, a potential Russia-Ukraine peace deal and softer commodity prices could further tame inflation. Corporate earnings and the labor market remain resilient, bolstering the outlook. Credit markets continue to show strength — a rare signal in the late stages of a business cycle. Capital spending initiatives in the U.S., defense spending in Europe, economic easing in China, and pro-growth reforms in Japan could further boost earnings. Meanwhile, the AI boom is accelerating, especially in the U.S. and China, with productivity gains likely to provide an underappreciated lift to earnings. JPMorgan recommends a barbell strategy: defensive stocks like utilities and consumer staples on one side, and rate-sensitive sectors like regional banks and real estate on the other. The bank downgraded large-cap banks to neutral from overweight and upgraded consumer discretionary stocks to neutral from short. Outside the U.S., Chinese tech and internet stocks present significant upside potential. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

The S&P 500 benchmark index closed Tuesday at its lowest level since November 4, wiping out gains accumulated since President Donald Trump’s November 5 election victory. Investor anxiety surged over concerns that the administration’s sweeping tariffs could dampen economic growth. The tech-heavy Nasdaq Composite briefly dipped into correction territory—defined as a 10% decline from its recent peak—before rebounding slightly. The index closed down 0.4% at 18,285.16, its lowest finish since November 4, after hitting an intraday low of 17,956.60. “Tariffs are likely to exert upward pressure on inflation and weigh on economic growth at the margin—an unfavorable combination for risk assets broadly,” said Josh Jamner, senior investment analyst at ClearBridge Investments. On Tuesday, the U.S. imposed 25% tariffs on imports from China and Mexico, along with an additional 10% tariff on Chinese goods, adding to last month’s 10% levy. China and Canada retaliated with their own measures, while Mexico is expected to announce its response by Sunday. After markets closed, Commerce Secretary Howard Lutnick suggested in a television interview that President Trump might be open to meeting Canada and Mexico halfway, potentially easing tariffs as early as Wednesday. A Nasdaq close below 18,156.50 would confirm a correction, reflecting a 10% drop from its record close of 20,173.89 on December 16. If the index falls 20% from its high, it would enter a bear market. The Nasdaq reclaimed its 200-day moving average of 18,376.37 after closing just below the level on Monday—a key technical indicator often seen as a gauge of the market’s long-term direction. The Dow Jones Industrial Average finished down 670.25 points, or 1.6%, at 42,520.99, after sliding as much as 843 points intraday. A close below 40,512.64 would confirm a correction from its record high of 45,014.04 set on December 4. The S&P 500 dropped 71.57 points, or 1.2%, to 5,778.15—its lowest close since November 4. A decline below 5,529.74 would confirm a correction from its February 19 record close of 6,144.15. The index flirted with its 200-day moving average of 5,725, a level not tested since November 2023. Jonathan Krinsky, chief market technician at BTIG, suggested this level could spark a short-term rebound, but warned that the market might require a more complex bottoming process. “The question isn’t whether we bounce at the 200-day moving average—it’s what happens after the bounce,” Krinsky wrote. “Investors are accustomed to ‘V-shaped’ recoveries, but we need to consider the possibility of a ‘W-shaped’ bottom, with a bounce followed by a re-test later this month.” Escalating trade tensions have heightened fears of a slowdown or recession, further unsettling markets. Nancy Tengler, chief executive and chief investment officer at Laffer Tengler Investments, believes the market is sliding into a correction. “Corrections always feel painful in the moment, and I believe we’re in one now,” Tengler wrote. She noted that corrections typically occur every 12 months and are often triggered by catalysts that seem dire at the time. “This time, it’s tariffs,” Tengler said. “The key is not just assessing the tariffs themselves, but their duration. If they’re short-lived, this could present a prime buying opportunity for long-term investors.” John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Global Investment Returns Yearbook Reveals Profitable Yet Volatile Stock Market A viral clip from Ferris Bueller’s Day Off, featuring economist Ben Stein’s monotone explanation of the Smoot-Hawley Act, has sparked renewed interest in economic history. The Act, which aimed to raise tariffs but inadvertently deepened the Great Depression, raises questions about its relevance in today’s economic landscape. On Tuesday, UBS released its Global Investment Returns Yearbook, offering a comprehensive analysis of 125 years of market performance. Compiled by Paul Marsh and Mike Staunton from the London Business School, along with Elroy Dimson from Cambridge University, the report highlights the long-term profitability of stock investing alongside its inherent volatility. Since 1900, U.S. stocks have delivered 6.6% annualized inflation-adjusted returns, significantly outperforming bonds at 1.6% and bills at 0.5%. Global markets outside the U.S. averaged 4.3% annually, reflecting consistent U.S. market outperformance—though recent months have shown a shift in this trend. The study emphasizes the volatile nature of stock markets, noting that recovery from major downturns often takes years. Investors waited 15.5 years to recover from the Great Depression, 10 years following the 1970s oil shock, 7.5 years after the dot-com crash, and four years post-global financial crisis. International diversification, a strategy popularized in 1974, has delivered mixed results. While most countries benefited, U.S. investors have seen little improvement in returns. The authors still advocate for diversification, cautioning that while it enhances the likelihood of better outcomes, success is not guaranteed. Cross-asset diversification has also shown long-term benefits, despite recent inflationary periods challenging its effectiveness. The 60/40 portfolio model (60% stocks, 40% bonds) remains a reliable strategy, offering better risk-adjusted returns than stocks or bonds alone. Stock market diversification pays off as well. Analyzing 64,738 companies across 42 countries from 1990 to 2020, the report found that 57% of stocks underperformed Treasury bills, and 71% trailed the index. However, gains from top-performing stocks more than compensated for these losses. Timing the market is notoriously difficult. Avoiding the worst 20 months over the past 125 years would have boosted returns by over 3% annually, but missing the best 20 months would have reduced returns by nearly 3% annually. The authors advise broad diversification unless one possesses exceptional stock-picking skills. Despite concerns about investing at market highs, historical data shows they are not reliable sell signals. Elroy Dimson remarked that investors who exited the U.S. market fearing overconcentration missed out on significant gains. Paul Marsh’s advice for investors is straightforward: “Don’t check your portfolio too often. Stay invested.” This timeless strategy remains particularly relevant amid today’s market uncertainties. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com