Stock ETFs Are About to Face Their Next Big Test
The S&P 500 successfully retested its March lows, but traders are bracing for President Donald Trump’s looming April 2 tariff bombshell.
The stock market passed a major test this week when the S&P 500 successfully bounced off its March 13 low, offering a ray of hope to investors after weeks of turbulence. That level—set when the index entered correction territory for the first time since 2023—was challenged again on Monday.
The S&P 500 dipped as low as 5,489 intraday, marking a 10.7% decline from its Feb. 19 all-time high, before staging a rebound.
By the end of the day, the index had clawed its way back into the green, closing at 5,611, up 0.6% on the day. For technical traders, the ability to hold the March low is an encouraging sign that the market may be carving out a bottom.
Still, the real test is just around the corner.
Tariff Storm in Motion
April 2, which President Donald Trump has dubbed "Liberation Day," is shaping up to be a pivotal moment, as Trump is vowing to unveil a sweeping new round of reciprocal tariffs aimed at America’s trading partners.
While the exact structure of the tariffs remains uncertain, recent reporting suggests the policy may be less "reciprocal" and more broad-based, with potential across-the-board tariffs of up to 20%, even on countries that don’t currently impose high tariffs on the U.S.
Investors are bracing for another bout of trade-related volatility. Some market watchers hope that April 2 will mark the peak of tariff escalation and that the Trump administration could use it as a starting point for negotiations to gradually unwind trade barriers.
Others are more skeptical, arguing that Trump is committed to a long-term overhaul of U.S. trade policy that includes permanently higher tariffs and a shift toward a more domestically focused economy, especially in manufacturing.
Uncertainy Weighs on Markets
That uncertainty continues to weigh on risk assets. While the S&P 500 has managed to stay just above its correction threshold, the Nasdaq 100, as tracked by the Invesco QQQ Trust (QQQ), remains in correction territory.
On Monday, QQQ was down as much as 15.4% from its high before paring losses into the close. Still, it remains well below its all-time peak, reflecting ongoing pressure on mega-cap technology stocks and growth-oriented names.
Markets have passed their first technical test, but with April 2 looming, the tariff gauntlet is just beginning.
