This Key Stock Market Indicator Is Flashing Red

A stock-market indicator has entered a phase historically associated with the worst return prospects for the S&P 500 Index. The Equity Market Regime Model, a Bloomberg Intelligence tool that tracks the benchmark stock gauge and clusters periods into three phases—accelerated growth (green), moderate growth (yellow) and decline (red)—fell into the cautious red zone in March and April.

The timing coincided with Donald Trump’s chaotic tariff threats and retreats, which managed to upend financial markets, dim Corporate America’s outlook for profit growth and, at least temporarily last month, destabilize key pillars of the US economy.