Stocks continued to trend lower on Thursday afternoon as President Trump addressed the ongoing market unrest, suggesting that the current situation is not as detrimental as he had anticipated. In a Cabinet meeting, Trump remarked, “Frankly, I thought the oil prices would go up more, and I thought the stock market would go down more,” adding that the market’s response has been milder than he expected.
During the meeting, Trump highlighted previous market milestones, noting that the Dow had surpassed 50,000 and that the S&P 500 briefly hit 7,000 earlier this year. However, both achievements proved to be fleeting. The S&P 500 hasn’t closed above the 7,000 mark and the Dow spent just four days at its elevated levels. At present, the S&P 500 is approximately 6.5% below its intraday high of 7,002 reached in late January. The index began to experience a pullback two weeks ago, nearing a 10% decline known as a correction, a threshold it approached last Friday. Meanwhile, the Dow sits 7.9% below its all-time closing high of 50,188.
Despite the market’s current struggles, Trump asserted that this pullback would be a “short-term hit” that would ultimately lead to increased stock prices in the future. Historical trends appear to support this notion. Analysts from Argus noted in a Thursday report that pullbacks are common occurrences in the stock market, with the average recovery time being around one month. In contrast, the recovery from a market correction, a more severe 10% decline, may take about four months depending on prevailing market fundamentals.
While the looming conflict in Iran poses uncertainties for market dynamics in the short term, Argus remains hopeful that both oil prices and interest rates will decrease once tensions ease. The analysts expressed optimism about the stock market’s potential, suggesting that gains could be seen by 2026. However, they tempered expectations by indicating that the forecasted returns might be in the single digits, in stark contrast to the 15%-25% gains investors have enjoyed over the past three years.
