Fundstrat Says a Bottoming Process in Stocks Has Begun

Why It Matters

The potential market bottom could shift investor sentiment from defensive posturing to selective buying, influencing capital allocation across sectors. Recognizing this inflection point helps portfolio managers anticipate volatility and position for the next growth cycle.

Key Takeaways

• Fundstrat sees early signs of equity market bottoming.
• S&P 500 posted best day since May, rose two days.
• March saw 5.1% S&P decline, worst since 2022.
• European and Asian indexes rallied, bolstering global recovery outlook.
• Near‑term volatility expected despite emerging bottom signals.

Pulse Analysis

Fundstrat’s recent commentary reflects a growing consensus among technical analysts that U.S. equities may be nearing a trough. Mark Newton points to the S&P 500’s two‑day surge—its best performance since May—as evidence that the relentless March sell‑off, which erased 5.1% of market value, is losing steam. The rally coincided with easing geopolitical tension in the U.S.–Iran conflict, a factor that had previously kept oil prices perched above $100 per barrel and weighed on risk assets. While the bounce does not constitute a green‑light purchase, it signals that the market’s downward momentum is weakening.

International markets are echoing the U.S. signal, with European benchmarks rebounding strongly after a sluggish start to the month and Japan’s Nikkei posting a pronounced bounce this week. These cross‑border rallies suggest that the corrective phase may be global rather than confined to a single region, offering investors diversification benefits as risk sentiment improves. Moreover, the synchronized recovery reduces the likelihood of a prolonged, fragmented downturn that could have forced capital into safe‑haven assets. For asset allocators, the emerging alignment underscores the value of a balanced, multi‑asset approach.

Despite these encouraging signs, volatility is likely to persist as markets digest lingering macro uncertainties, including oil price volatility and the pace of diplomatic resolution in the Middle East. Investors should therefore prioritize risk management, using the anticipated early‑April consolidation window to tighten stops and evaluate sector‑specific catalysts before committing new capital. By staying disciplined and monitoring technical thresholds, portfolio managers can capture upside when the broader bottom solidifies while protecting against sudden reversals.