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Strategists Predict Trouble for U.S. Stocks After Massive U-Turn

  • Bespoke says Nasdaq historically drops after a big reversal
  • Evercore eyes ‘Fed put’; Cambiar cautious on ‘clown stocks’
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Monday’s U.S. market action was wilder than most in its history, with the S&P 500 falling about 4% before ending slightly higher. 

While positive turnarounds are often viewed as a good sign, that might not be the case here. According to calculations by Bespoke Investment Group, Monday was the sixth time since 1988 that the Nasdaq erased a 4%-plus intraday decline to close higher on the day. On previous occasions the tech-heavy gauge saw a median decline of 5.5% one month later and a drop of 7.9% three months down the line.