A lengthy run for the S&P 500
These days, the stock market is showing up on both the “best of” and “worst of” lists. For example, just last week:
- The S&P 500 suffered its worst 100-day start to a presidential term since 1972, driven by fears that a tariff war could cause a global recession.
- Conversely, the S&P 500 also notched its ninth consecutive day of positive returns. The chart below shows that it is the index’s longest daily winning streak since late 2004, more than 20 years ago.
A History of the S&P 500’s Consecutive Daily Winning Streaks
(Through May 2, 2025)
Source: Bloomberg, calculations by Horizon Investments, data as of 05/05/25. It is not possible to invest directly in an index.
One result of that nine-day run (which ended Monday when stocks were down slightly): The market has fully recovered from the post-Liberation Day losses it experienced after President Trump announced a wave of tariffs on imported goods. The S&P 500 is now up from its recent low in early April, although it’s still below its mid-February record high. In particular, retail investors have shown a willingness to buy stocks on days when the market has fallen.
While the market’s sharp upswing is good news, it also raises some concerns. Investors today are bidding up stock prices largely based on the belief that the administration will quickly strike new trade deals with other nations and reduce (or even eliminate) some of its existing and planned tariffs. However, as we’ve seen, predicting President Trump’s decisions is notoriously tricky. If the trade situation isn’t resolved swiftly and painlessly, investors could turn skittish and cause the market’s recent gains to reverse course.
In this environment, we believe diversification across asset classes, sectors, and regions remains a prudent course for clients as part of a larger financial plan that reduces emotional decision-making from investing.
