There’s good news and bad news in the market these days. The good news is the market has finally gotten some reprieve from the steep price declines seen in recent weeks. The bad news is there’s very little conviction behind the bounce. Over the past two sessions, the S & P 500 has jumped more than 2.5% after tumbling into a correction late last week — down more than 10% from a record set in February. The move has many on Wall Street hoping the sell-off in recent weeks — sparked in part by fears of slower economic growth due to U.S. tariffs — might be nearing its end. But a look at trading volume over those two session points to this being more of a short-lived pop. The SPDR S & P 500 ETF Trust (SPY) traded just 58.8 million shares on Friday and 54.8 million shares on Monday, far below a 10-day average of 78.5 million shares, according to FactSet. A look at volume across all exchanges doesn’t paint a much brighter picture. FactSet shows that U.S. composite volume totaled 14.9 billion shares on Friday and 14.0 billion shares on Monday. Both were below under a 50-day average of about 15.7 billion. Low trading volume usually indicates a lack of conviction in terms of market direction. Many strategists look for heavy volume to confirm whether a sharp market move — up or down — has legs. Former JPMorgan strategist Marko Kolanovic also pointed out that Monday’s close was ” not very strong ,” meaning it could “indicate the end of the bounce.” On top of that, Wolfe Research’s Rob Ginsberg noted that “the lack of any real fear leaves us a bit dubious that a real low has been made.” All that said, Ryan Detrick of the Carson Group highlighted a positive. Both Friday and Monday saw more than 90% of S & P 500 stocks closing the day higher. Since 1972, the broad market index has averaged a 15% return one year later following back-to-back sessions in which nine of every 10 stocks in the benchmark closed higher. Elsewhere Tuesday morning on Wall Street, Goldman Sachs upgraded Ralph Lauren to buy from neutral. Its 12-month price target of $286 implies upside of more than 30% over the coming year. The investment bank said Ralph Lauren has “more limited exposure to key near-term macro risks vs. peers, including tariffs, department store slowdown and the health of the lower-income consumer.” Correction: Since 1972, the broad market index has averaged a 15% return one year later following back-to-back sessions in which nine of every 10 stocks in the benchmark closed higher. A previous version misstated the return.
There is very little conviction behind this stock market bounce
Mar 18, 2025
