{"id":20152,"date":"2025-04-07T10:34:26","date_gmt":"2025-04-07T10:34:26","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=20152"},"modified":"2025-04-07T10:34:26","modified_gmt":"2025-04-07T10:34:26","slug":"sp-500-slumps-into-bear-territory","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/sp-500-slumps-into-bear-territory\/","title":{"rendered":"S&amp;P 500 Slumps Into Bear Territory"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/download-121-1-1024x559.png\" alt=\"\" class=\"wp-image-18740\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>S&amp;P 500 futures down 3.11% by 4:42 a.m. ET, with the index now over 20% off its peak\u2014formally entering a bear market.<\/li>\n\n\n\n<li>10-year US Treasury yields drop to 3.953% as recession risks climb and traders price in a fifth Fed rate cut this year.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The US stock market is facing one of its most volatile weeks in years as escalating trade tensions and macroeconomic pressures drive traders out of equities and into safer assets.<\/p>\n\n\n\n<p>At 4:42 a.m. ET (0942 GMT), <strong>S&amp;P 500 E-mini futures fell 159 points<\/strong>, or <strong>3.11%<\/strong>, following a brutal two-session slide that erased <strong>10.5%<\/strong> from the index and wiped out nearly <strong>$5 trillion<\/strong> in market capitalisation. The benchmark <strong><a href=\"https:\/\/finance.yahoo.com\/news\/live\/stock-market-today-dow-plunges-2200-points-nasdaq-enters-bear-market-as-trump-tariffs-spark-worst-meltdown-since-2020-200042876.html\">S&amp;P 500 has now dropped more than 20% from its all-time highs<\/a><\/strong>, effectively meeting the technical definition of a <strong>bear market<\/strong>\u2014the first since the pandemic-induced crash of March 2020.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Get up to speed on what&#39;s moving global markets <a href=\"https:\/\/t.co\/ISfjbccGdD\">https:\/\/t.co\/ISfjbccGdD<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1909015962004664791?ref_src=twsrc%5Etfw\">April 6, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>President Donald Trump\u2019s <strong><a href=\"https:\/\/finance.yahoo.com\/news\/live\/trump-tariffs-live-updates-trump-digs-in-says-markets-may-have-to-take-medicine-as-stock-futures-plunge-191201959.html\">refusal to ease tariffs or negotiate with China<\/a><\/strong> until the US trade deficit is corrected has spurred panic across global markets. Traders are interpreting this as a signal that the trade war could drag on longer than previously expected, deepening economic pain.<\/p>\n\n\n\n<p>The <strong><a href=\"https:\/\/www.reuters.com\/markets\/us\/futures-plunge-sp-500-eyes-bear-territory-market-rout-worsens-2025-04-07\/\">Nasdaq 100 futures dropped 598.5 points<\/a><\/strong><strong> (-3.41%)<\/strong>, while <strong>Dow futures were down 1,178 points (-3.06%)<\/strong>. The Nasdaq Composite itself has now also entered bear market territory, led by a steep sell-off in technology stocks. The <strong>Dow Jones Industrial Average has slumped over 10%<\/strong> from its recent record close.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Flight to Safety Intensifies<\/h2>\n\n\n\n<p>Bond markets are flashing warning signals as traders rush into safe-haven assets. The <strong><a href=\"https:\/\/www.cnbc.com\/2025\/04\/03\/us-treasury-yields-trumps-tariffs-raise-concerns-of-trade-war.html\">10-year US Treasury yield<\/a><\/strong><strong> has plunged to 3.953%<\/strong>, marking a swift retreat below the psychological 4% level. This reflects <strong>strong demand for government bonds<\/strong> as market participants brace for an economic downturn.<\/p>\n\n\n\n<p>Traders have now <strong>priced in a <\/strong><strong><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-04-07\/traders-boost-fed-bets-see-five-more-interest-rate-cuts-in-2025\">54% probability of a fifth interest-rate cut from the Federal Reserve<\/a><\/strong><strong> this year<\/strong>, suggesting that monetary easing may be necessary to stabilise the economy amid a deepening trade crisis.<\/p>\n\n\n\n<p>The <strong><a href=\"https:\/\/www.vtmarkets.com\/indices\/\">CBOE Volatility Index (VIX)<\/a><\/strong>\u2014commonly referred to as Wall Street\u2019s fear gauge\u2014<strong>spiked 7.57 points to 52.88<\/strong>, its highest reading since the early days of the COVID-19 panic. This level of implied volatility implies continued disorder in the short-term outlook for risk assets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The 15-minute candlestick chart for the <strong>S&amp;P 500 (SP500)<\/strong> shows a steep downward trajectory, with the price <strong>dropping from a high of 4964.07 to a low of 4802.15<\/strong>, before attempting a modest rebound to close at <strong>4886.02<\/strong>. Short-term moving averages (5, 10, 30) remain in bearish alignment, indicating <strong>sustained selling pressure<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/1_image-6-1024x446.jpg\" alt=\"\" class=\"wp-image-20153\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: From sell-off to setup\u2014SP500 claws back after touching fresh lows, as seen on the <\/em><em><a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>The <strong>MACD (12,26,9)<\/strong> shows bearish momentum easing slightly, with the histogram beginning to shift green after deep troughs, suggesting early signs of technical relief\u2014but no clear reversal yet.<\/p>\n\n\n\n<p>The market may be due for a brief technical bounce, but <strong>downside risks remain elevated<\/strong>. Traders should watch the <strong>4,800 support level<\/strong>, a break below which could lead to a swift retest of February lows.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>Given the sharp rise in volatility and the hawkish stance on trade from Washington, market conditions are likely to stay unstable. The prospect of further interest-rate cuts may offer a medium-term cushion, but sentiment remains fragile. Any short-term rallies could prove to be <strong>bear market traps<\/strong> unless fundamental data\u2014like Thursday\u2019s consumer price figures\u2014deliver a material shift in the inflation narrative.<\/p>\n\n\n\n<p>Traders should stay defensive. Expect continued rotation into bonds and safe-haven sectors, while equity markets may trend lower until clearer policy signals emerge.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong> and <\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a><\/strong><strong> now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>S&amp;P 500 futures plunge over 20% from highs, rattled by recession fears and escalating trade war tensions. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":18740,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[11],"class_list":["post-20152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-indices"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/20152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=20152"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/20152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/18740"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=20152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=20152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=20152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}