Stocks Rebounds After Historic Slump, but Volatility Signals Caution

The S&P 500 surged 95.31 points (+1.81%) to close at 5,363.36 on Friday, April 11, 2025, offering some relief after a week of intense volatility triggered by escalating U.S. trade tensions. The benchmark index fluctuated sharply during the session, trading between a low of 5,220.77 and a high of 5,381.46, before settling near the upper end of its range (WSJ Market Data).

The rebound followed a historic rout earlier in the week, when U.S. stocks shed over $6.6 trillion in market value due to President Trump’s sweeping tariffs—a 10% global levy and a 145% rate on Chinese imports. The initial shock led to the worst two-day drop in U.S. stock market history, pushing both the S&P 500 and Nasdaq into bear market territory.

Next Session Outlook: Relief Rally or Temporary Pause?

While Friday’s gains provided a psychological boost, analysts are cautioning that market sentiment remains fragile. Despite the rally, the S&P 500 is still down 8.8% year-to-date. According to AP News, investors remain wary that policy risks and inflationary pressures may lead to further economic strain.

Goldman Sachs warns the recent market bounce may be a temporary reaction rather than a full recovery. The firm places a 35% probability on the likelihood of further stock declines over the next three months, citing unresolved trade tensions and deteriorating investor confidence (Business Insider).

Another wild card is the Federal Reserve’s response. While rate cuts could calm markets, persistent inflation and political uncertainty may constrain the central bank’s ability to act swiftly.

Key Technical Indicators Suggest Volatility Ahead

From a technical perspective, the S&P 500 faces an uphill climb to reclaim lost ground. Analysts identify 4,800 as a key support level. A break below this threshold could invite renewed selling pressure. Resistance is projected between 5,500 and 5,800, a zone that may prove difficult to breach without a significant macroeconomic catalyst (EquityClock Analysis).

Traders are also watching volume patterns closely. Friday’s surge occurred on average volume, suggesting the move may lack strong institutional backing. To sustain momentum, the market will need confirmation via broad sector participation and consistent demand in upcoming sessions.

Despite Friday’s rally, markets are far from stable. With trade policy still in flux and inflationary fears looming large, the next trading session could be pivotal in setting the tone for the rest of April. Investors are advised to remain vigilant and consider defensive strategies amid ongoing uncertainty.