Fundstrat strategist signals US stocks may have bottomed

Despite a volatile start to the month and geopolitical tensions weighing on global markets, technical analysts at Fundstrat believe the worst of the equity sell-off may finally be in the rearview mirror.

While the Dow Jones Industrial Average faced a sharp 700-point stumble on Thursday amid surging energy prices, the resilience shown earlier in the week has caught the attention of market veterans.

Cause: sharp moves, energy prices, and geopolitical pressure

The sell-off pressure came as energy prices surged, contributing to a sharp 700-point decline in the Dow on Thursday. At the same time, geopolitical tensions continued to weigh on global markets.

Development: evidence of a shift in momentum

Technical strategist Mark Newton said the recent surge in major averages points to a structural shift in market momentum, suggesting that the bottoming process for the current correction is underway.

Newton highlighted that the two-day surge earlier this week, when the S&P 500 posted its strongest performance since May, provided evidence of changing investor sentiment. He also noted that the bounce did not provide “green lights” to buy at the lows, but argued the magnitude of the move was too significant to dismiss.

In his view, the price action reflected foundational stabilization rather than a desperate short-covering rally. Newton also said he is no longer convinced that US indices need to move back to new lows, implying the market’s floor may already be in place.

Data and context: March correction and global confirmation

Fundstrat’s analysis suggests the bottoming narrative is not confined to Wall Street. The firm pointed to technical signals in Europe and Asia that have improved the overall setup.

European markets began the month with a vigorous rebound, and Japan’s Nikkei has shown strength that mirrors the recovery seen in the US.

Newton also referenced the broader backdrop, noting that the broad-based sell-off seen in March was the worst for the S&P 500 since 2022, and that the current phase appears to be transitioning into healthy consolidation.

Impact: reduced risk of renewed lows, but volatility remains

Newton described the improving technical picture across global indices as an important indicator that the macro-environment is slowly healing from recent lows.

However, he cautioned that the path toward new highs is unlikely to be linear. He expects near-term volatility as the market digests fluctuating oil prices and the de-escalation of the US-Iran conflict.

Analysis and near-term plan: consolidation window in early April

Newton said a period of consolidation between April 5 and April 9 could be beneficial. He argued that this would improve the short-run risk/reward setup compared with trying to chase the two-day bounce.

By allowing the market to stabilize at current levels, investors may be less exposed to the pitfalls of emotional trading. Overall, Newton characterized the recent correction as orderly, suggesting the bottoming process is more about building a base than surviving a crash.