In April, the Dow Jones Industrial Average and 500 were stuck in correction territory, while the Nasdaq Comprehensive was immersed in a full-scale bear market.
Several catalysts, including President Donald Trump (often changed) tariff policies, have stimulated important unrest in Wall Street.
The historic two-day decline of the S&P 500 has traditionally led to opportunistic and optimistic investors' returns.
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Investors are not enough to increase their nominal wealth, including buying real estate, buying bonds or certificates of deposit (CD) or putting money into various commodities such as gold, silver and oil. However, in the last century, no asset class had higher average annual returns than stocks.
Although iconic multi-year chart Dow Jones Industrial Average(djindices: ^dji)based on a wide range of S&P 500(snpindex: ^gspc)and growth Nasdaq Composite Materials(NasdaqIndex: ^i tocie) The decisively higher viewpoint and narrower view of trading activity suggest that Wall Street's volatility and uncertainty are completely normal.
As the S&P 500 peaked on February 19, both the Dow Jones and the S&P 500 were immersed in the correction field. Meanwhile, Nasdaq Composite entered its first bear market in three years.
Image source: Getty Images.
Often, stock market corrections and bear markets are events in which eyebrows are appreciated. But, for most of April, a historic volatility was the reason for stealing the show.
While historical volatility can sometimes be frightening, an extremely unique event for the April S&P 500 is a clear direction for optimistic stocks that should have long-term investors smile from ear to ear.
To make the wild things wild in the weeks last month, the S&P 500 recorded the fifth decline in the record since 1950, which was since 1950 (April 3 and April 4) and its 12th-highest four-day price cuts (dating from 75 (April 3 to April 3 to April 3)).
The brief stock market crash was subsequently the biggest single-class point increase since its establishment on April 9th since the Dow Jones, the S&P 500 and the Nasdaq Comprehensive. On a percentage basis, DOW, S&P 500 and NASDAQ are 19th, 8th and 2nd, daily earnings, respectively.
This is what historical volatility looks like on Wall Street – it has several culprits.
After the end of April 2, President Donald Trump's tariff policy revealed the (temporary) collapse that initially issued the main index (temporary). At the time, Trump announced 10% of global tariffs worldwide, along with a higher “reciprocal tax” aimed at trade collapses on several of our countries, trade sales for multiple thrones, trade sales for the 90s in the 90s, trade sales for the 90s (which were outside the 90s (which were 90 days). Dow, S&P 500 and Nasdaq soared), and lowered the 90-day mutual tariff rate with China earlier this week.
DOW, S&P 500 and NASDAQ composites are all over the map for April. ^DJI data is by YCHARTS.
Investors are eager for predictability, and they simply don't get predictability from this administration. Trump's tendency to shift tariff rates, implementation dates and which products/countries are subject to tariffs put Wall Street on the edge.
But tariffs are not the only whip catalyst for stocks.
For example, the stock market entered 2025 in one of the most expensive valuation multiples in history, after more than 150 years of examinations. Since January 1871, Shiller's price-to-earnings ratio (P/E) ratio (also known as the periodically adjusted price-to-earnings ratio or CAPE ratio) has an average of multiples of 17.24. In December 2024, it reached almost 39 times in the current bull cycle.
Historically, the S&P 500 Shiller P/E reading above 30 is a pioneer in the final downside aspect of at least 20%. Companies with premium valuations tend to pay when volatility is received. The problem is that these expensive businesses are often responsible for leading the charges in the stock market.
In addition to Trump’s tariffs and historic prices in the stock market in 2025, investors also showed a 0.3% shrinkage in the first quarter of the U.S. GDP, while Treasury bills generated a higher rate in a short period of time.
Image source: Getty Images.
As mentioned earlier, one or more wild gyroscopes in major Wall Street stock indexes can be frightening — especially if you are a new investor who has never experienced a brief crash or whip volatility before. However, one of the weird quirks of the stock market is that some of its biggest gains often occur very close to their biggest losses.
Analysis-based data Wells Fargo Daily price changes for the S&P 500 Investment Institute and Bloomberg between February 1, 1994 and January 31, 2024, the index's 30 best and 30 worst days have occurred close to each other – often falling in bear markets. That said, the sharp decline in the Wall Street benchmark index usually produces dazzling returns.
In April, the S&P 500 index fell 10.5% from its closing clock on April 2 to its closing ceremony on April 4. This is the fifth largest two-day decline since 1950, representing only the sixth time in 75 years, based on the broad index has lost at least 10% of its value in two days.
As history shows that the darkest days in the market tend to bring the best returns, Ryan Detrick, the chief market strategist at Carson Group, plots future stock gains for the S&P 500 after these six unique double-digit, two-day percentage drops (applicable).
As you can see from the Detrick post on social media platform X, there is a lot of green in a month. On average, the S&P 500 bounced 8.3% in all six double-digit, two-day declines.
But that pales compared to the year after the 500 index fell by at least 10% five days later. The “worst” rate of return a year later was 18%, and the S&P 500 averaged 32.6%. Putting this number in context, according to Detrick's dataset, the S&P 500's average annual return since 1950 was only 9.2%. This means the index has doubled to make its average annual return of at least 10%.
Furthermore, Ryan Detrick's post hints at the disproportionate share market cycle. While investors may be fully focused on the possibility of stock market corrections or bear markets, there is a big difference between the length of the bull market on Wall Street and the bear market.
About two years ago, shortly after confirming that the S&P 500 is in a new bull market, researchers at Custom Investment Group released a dataset that calculates the calendar day lengths of 500 bulls and bears each year since the beginning of the Great Depression (September 1929).
On the one hand, the average S&P 500 bear market lasted only 286 calendar days, about 9.5 months. In comparison, the typical bull market has lasted 1,011 calendar days, about 3.5 times. No matter how terrible the stock market may seem, history shows that staying optimistic and long-standing pathways to wealth creation.
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Wells Fargo is an advertising partner for Motley Fool Money. Sean Williams owns a position at Wells Fargo. Motley fool has no position in any stock mentioned. Motley Fool has a disclosure policy.
The S&P 500 did 6 times in April for 75 years, which points to the very specific directional nature of stocks, originally published by Motley Fool
