Fundstrat strategist says US stocks may have bottomed

• The recent two-day rally in US indices was the S&P 500's strongest performance since May, signaling a potential 'bottoming process' rather than temporary short-covering
• Global market coordination supports the recovery thesis, with European and Asian markets showing similar rebound signals after the S&P 500's worst March since 2022
• Newton expects continued near-term volatility through April 5-9 as markets digest oil prices and geopolitical de-escalation, but views consolidation as healthy for establishing a better risk/reward entry point

Summary

Key Developments:

Fundstrat's technical strategist Mark Newton believes US stocks may have bottomed despite ongoing volatility from the US-Iran conflict. The S&P 500 is currently down 6% from its year-to-date high, following its worst month since 2022 in March.

Technical Analysis:

Newton points to a significant two-day rally earlier in the week—the S&P 500's strongest performance since May—as evidence of a structural shift in market momentum rather than mere short-covering. While he acknowledges the "bounce failed to give any green lights to buy at the lows," he states he is "not convinced anymore that US indices require a further move back to new lows," suggesting the market floor has been established.

Global Market Coordination:

The bottoming signal extends beyond US markets. European and Asian indices, including Japan's markets, are showing synchronized recovery patterns that "brightened the overall technical setup," providing additional support for the recovery thesis.

Near-Term Outlook:

Newton expects continued volatility as markets digest fluctuating oil prices and US-Iran tensions. He anticipates a consolidation period between April 5-9 would be healthy, creating "better risk/reward opportunity in the short run vs. trying to chase this two-day bounce." The Dow Jones fell Thursday amid surging energy prices, though earlier weekly resilience has encouraged analysts.

Market Implications:

The analysis suggests the recent correction represents an orderly bottoming process rather than a crisis, with global market alignment providing a cushion against domestic volatility. Investors are advised to avoid emotional trading and allow markets to stabilize at current levels.