Search

The catalyst that has driven this market higher for more than two years got punched in the face on Monday. Is it the end of the gravy train or just an overreaction?

Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.

Things are getting dicey in the market.


The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.

The market just had a big leg higher. Last Friday the S&P 500 concluded an epic nine-day run of positive gains, the longest such streak in more than 20 years. The index rose by more than 10% during the streak. What’s going on?

Things are certainly looking up in the market. The S&P 500 had an epic nine-day run of positive gains, the longest such streak in more than twenty years. The index rose over 10% during the streak. What’s going on?

The rally began after President Trump indicated a de-escalation of the trade war with China. There are ongoing negotiations with the other trading partners during the 90-day pause initiated on April 9^th. A perception is building that the worst of the tariff uncertainty is behind. Stocks also got a boost from earnings and economic news.

We preach stock market optimism here at Cabot, but it’s worthwhile to take a look at the bigger picture and consider what could go wrong in the rest of 2025.

The U.S. recently suffered a credit downgrade from Moody’s, the last ratings agency to do so, but is it a big deal, and what does it mean for investors?

Last week was another up week for the S&P 500. The index has made up all the tariff Armageddon losses, it’s in positive territory YTD and is within 3% of the all-time high.


The market is flat so far this week. But after the big surge higher, it’s encouraging that the index isn’t pulling back. Perhaps stocks are consolidating a bit ahead of another move higher.

Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment, and it’s a trend to bank on regardless of market gyrations.