The Bull Market is Dead: What Investing Pros Are Saying After a Historic 2-Day Stock Market Crash

The stock market has been on a wild ride this week, with the S&P 500 losing nearly 7% over the last five trading days and the Nasdaq 100 slipping into bear market territory for the first time since 2022. The trade war and the implementation of new tariffs have pushed the U.S. economy closer to a downturn, and investing professionals are sounding the alarm that the bull market may be dead.

John Hussman, the president of Hussman Investment Trust, stated that his firm's recession gauge, the Hussman Recession Warning Composite, flashed a positive signal on April 1, 2025, indicating an increased risk of a recession. JPMorgan also raised its risk of a coming recession to 60%, up from its prior estimate of 40%, due to the disruptive U.S. policies.

The trade war has the potential to devastate the global economy, as other countries, including China, are already beginning to retaliate against U.S. tariffs. This retaliation will slow global growth, further exacerbating the economic downturn.

The Federal Reserve may react to economic weakness by cutting interest rates even faster than markets anticipated. Jason Pride, the chief of investment strategy at Glenmede, wrote that four to five rate cuts are now looking to be the "new baseline for 2025." This indicates that the Fed is concerned about the economic outlook and is prepared to take action to stimulate the economy.

Investors believe the outlook for stocks has deteriorated meaningfully in the event of a prolonged trade war. Emily Bowersock Hill, the CEO of Bockersock Capital Partners, wrote that the bull market is dead and has been destroyed by ideologues and self-inflicted wounds. She revised her year-end target on the S&P 500 from 6000 to 5700, indicating a more pessimistic outlook for the stock market.



The current market conditions show significant parallels to historical market crashes, such as the 1929 stock market crash and the 2020 COVID crash. These comparisons can provide valuable lessons for understanding the current market dynamics and potential future outcomes.

The 1929 crash began on "Black Thursday," October 24, 1929, when the market opened 11% lower than the previous day's close. The market continued to decline, with the Dow Jones Industrial Average (DJIA) closing down 13% on Black Monday and another 12% on Black Tuesday. The crash was preceded by a period of phenomenal growth and speculative expansion, similar to the current market's volatility driven by trade policies.

The 2020 COVID crash was triggered by the government's reaction to the Novel COVID-19 outbreak, leading to a rapid spread of the virus and significant economic disruption. The market collapse in March 2020 was caused by the pandemic's impact on various sectors, including healthcare, natural gas, food, and software, leading to a sharp increase in unemployment.

The current market conditions, as described by investing professionals, show significant parallels to historical market crashes, such as the 1929 stock market crash and the 2020 COVID crash. These comparisons can provide valuable lessons for understanding the current market dynamics and potential future outcomes.

The 1929 crash led to the Great Depression, which lasted approximately 10 years and affected both industrialized and nonindustrialized countries. The U.S. economy shrank by more than 36% from 1929 to 1933, as measured by Gross Domestic Product (GDP), and the unemployment rate surged to over 25%.

The 2020 crash led to a global economic downturn, with many countries implementing lockdowns and other measures to control the spread of the virus. The unemployment rate skyrocketed in the first quarter of 2020, and the global economy experienced a significant contraction.

The Federal Reserve's actions, such as raising the discount rate from 5% to 6% in August 1929, had unintended consequences, including forcing foreign central banks to raise their own interest rates and tipping economies around the world into recession.

Central banks around the world implemented aggressive monetary policies, including quantitative easing and interest rate cuts, to support their economies during the pandemic. These measures helped to stabilize financial markets and prevent a more severe economic downturn.

The crash was preceded by a period of rampant speculation, with many investors buying stocks on margin and borrowing money to finance their investments. When the market began to decline, investors rushed to sell their stocks, leading to a panic and a further decline in stock prices.

The crash was characterized by a sudden drop in stock prices, with investors selling shares following a sudden drop in market prices after having purchased many shares before the market crash. This led to significant losses in investors' portfolios.

Market volatility and uncertainty can lead to significant declines in stock prices. Investors should be prepared for such volatility and avoid panic selling.

Economic downturns and recessions can follow market crashes, as seen in the Great Depression and the 2020 COVID crash. Investors should be aware of the potential for a prolonged economic downturn and adjust their investment strategies accordingly.

Government and central bank responses to market crashes can have significant impacts on the economy and financial markets. Investors should pay attention to policy changes and their potential effects on the market.

Investor behavior, such as panic selling, can exacerbate market declines. Investors should maintain a long-term perspective and avoid making impulsive decisions based on short-term market movements.

The current market conditions, as described by investing professionals, show significant parallels to historical market crashes, such as the 1929 stock market crash and the 2020 COVID crash. These comparisons can provide valuable lessons for understanding the current market dynamics and potential future outcomes.