Stocks continued their downward trajectory on Thursday afternoon as President Trump commented on the ongoing market volatility, suggesting that the current downturn is less severe than he anticipated. During 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 reaction has not been as damaging as he expected.
In his address, the President highlighted notable milestones for the market earlier in the year, pointing out that the Dow surpassed 50,000 and the S&P 500 reached 7,000. However, both achievements were short-lived, with the S&P never closing above its intraday high, and the Dow only spending four days above its peak. Currently, the S&P 500 is approximately 6.5% below its intraday peak of 7,002, which it reached in late January, having entered a pullback—a 5% drop—two weeks ago. Last Friday, the index approached correction territory, which is defined as a 10% decrease. Meanwhile, the Dow is trading at 7.9% below its all-time closing high of 50,188.
During the meeting, Trump characterized the current market pullback as a “short-term hit” that would ultimately lead to an increase in stock prices. Analysts from Argus noted that although pullbacks are common occurrences, the average recovery period tends to be around one month. In the case of a correction, they suggested it could extend to four months, although the duration depends on existing market conditions.
Despite the grim outlook influenced by ongoing tensions in the Middle East, particularly related to the Iran conflict, Argus analysts expressed optimism that market factors such as oil prices and interest rates would stabilize once the situation improves. They predicted overall modest gains for stocks, estimating that returns would likely be in the single digits for the upcoming year, contrasting sharply with the 15% to 25% returns seen in the previous three years.
