S&P 500 Recovers Sharply After Unexpected GDP Contraction
By: cointribuneen|2025/05/03 15:30:02
0
Share
What if markets followed a tempo that escapes economic logic? While the US GDP is declining, the S&P 500 is bouncing back after a sharp drop of nearly 20 %. This unexpected turnaround, fueled by contradictory signals, intrigues even in trading rooms. Indeed, at BNP Paribas, strategists wonder: does this rapid correction fit into a global tradition ? To understand it, they dive back into a century of stock market crash history. A Crash Without Recession? Between February 19 and April 8, 2024, the S&P 500 index lost nearly 20 %, falling from 6,144.15 to 4,982.77 points. This downward sequence, which BNP Paribas analysts called the “Tariff Crash” , attracted their attention because of its size, but also its context. Greg Boutle, Bénédicte Lowe, and Aurélie Dubost write in a note published this Friday : They add: “Crashes that occur without a marked economic slowdown can be significant and volatile, but tend to be relatively short-lived.” By tracing market movements back to the 1920s using Dow Jones data, the authors show that significant drops can occur even without a major macroeconomic shock. Several conjunctural elements have confirmed this interpretation and supported the rebound observed at the end of the studied period : The three main US stock indices posted weekly gains close to 3 %, just two days after the announcement of a GDP contraction in the first quarter (-0.3 %) ; Treasury bond yields jumped as investors abruptly reversed their bets on a slowdown ; The April employment report showed 177,000 job additions, a figure above expectations, while the unemployment rate remained stable at 4.2 % ; Beijing was considering restarting trade talks with the United States, easing tariff-related tensions ; Midweek market behavior, notably a spectacular bullish turnaround in the Dow and the S&P 500, highlighted the resilience of stocks despite a deteriorated macroeconomic environment. A Fragile Rebound and Lingering Uncertainties While BNP Paribas’s historical analysis tends to mitigate the severity of the “Tariff Crash” , strategists do not overlook the structural vulnerabilities that could plunge markets back into turmoil. In the same note, they warn of an alternative scenario: “stocks could retest their annual lows if a combination of downward earnings revisions and multiple compression materializes.” Multiple compression, which means a decline in stock valuations tied to earnings outlooks, could indeed challenge the current rebound, especially if growth deteriorates further. A resurgence of the market thus rests on an unstable balance between hopes for a de-escalation in trade tensions, conjunctural resilience, and corporate earnings momentum. Moreover, the authors remind us that economic forecasts, even those supported by long-term analyses, can prove to be out of sync with reality. “In 2022, our model projected an S&P 500 around 3,000 and VIX reaching 40 by mid-2023,” they note, before emphasizing that these levels were ultimately never reached. This observation calls for caution regarding current predictions. Especially since other signals, such as the sharp rise in bond yields observed late last week, indicate the market continues to oscillate between fear of a sudden slowdown and hope for a soft landing. Thus, any macroeconomic surprise or a resurgence of trade tensions could abruptly reverse the current trend. Ultimately, while the S&P 500’s rebound seems to validate the hypothesis of a crash without recession, the balance remains precarious. The precedent of 2022 reminds us that even the best-constructed scenarios can be contradicted by facts. For investors, the lesson is clear: market resilience should not be interpreted as a free pass. Between encouraging signs and lingering uncertainties , the coming weeks will be decisive in deciding between a simple technical correction and a deeper economic turnaround.
You may also like

Bearish Traders Continue to Short Bitcoin | Rewire News Morning Update
Binance Perpetual Contract Funding Rate has been negative for 46 consecutive days, with open interest rising accordingly

Is Nasdaq About to Reach a New High, Is the Bull Market Back?
Almost all assets are up

Goldman Sachs Applies for Bitcoin ETF, Wall Street's Final Bastion Falls
Wall Street has no faith, only a ledger. When the number on the ledger is large enough, any faith will change.

Only Working 2 Hours a Day? This Google Engineer Got His Job Done Using Claude for 80% of It
One File, Three Commands, AI Will Not Replace Programmers, But Will Eliminate Those Who Cannot Set Up a System

Interpreting Stanford's 423-page AI Report: US-China Gap Narrows to 2.7%, Tsinghua's DeepSeek Enters Global Top Ten
This comprehensive 423-page annual report unveils the latest power map of the global AI industry.

YouTube will become the next new type of bank
YouTube will become the next new type of bank. Not because YouTube will apply for a banking license, but because wherever the money comes from, financial services should be there.

How to Reshape On-Chain Transaction Logic? Exploring the Rise of Stablecoin Execution Layers
UXUY is redefining on-chain transaction logic by using a stablecoin-driven execution network to simplify complex cross-chain operations into a "one-click result," allowing users to complete full-chain transactions without worrying about paths, gas, or chains, only needing to decide the destination o...

Why AI Memecoins are Failing the Reality Test
From 90,000% gains to a 98% crash—discover why the AI Meme bubble is bursting and what the shift to "AI Utility" means for your portfolio.

Morning News | Kraken receives $200 million investment from Deutsche Börse; Goldman Sachs submits application for Bitcoin Premium Income ETF; Walsh discloses his cryptocurrency holdings
Overview of Important Market Events on April 14

Hong Kong licensing, stablecoin landscape changes: Who is reshaping the next generation of the financial landscape?
Take the lead in exploring a more institutionalized, verifiable, and implementable development path for non-U.S. dollar stablecoins.

IOSG: TAO is like the Elon Musk who invested in OpenAI, Subnet is like Sam Altman
The DAO's Game is Risky, Success Depends Entirely on User Ecosystem Stickiness

Stablecoin License Battle Concludes: Anxiety-Ridden Hong Kong, Will Not Wait for the Next Tether
Hong Kong is trying too hard to prove itself.

You can grasp a new field in half an hour, how to quickly establish a cognitive framework using AI?
Teaching you to Quickly Understand a New Field with AI-Assisted Horizontal and Vertical Analysis

Franklin Templeton's latest research: How to understand RWA tokenization
From the initial foray of emerging platforms to the full entry of traditional financial giants, tokenization has broken down traditional trading barriers. Through models such as digital-native and synthetic assets, capital has gained unprecedented liquidity and transparency.

Espanyol vs FC Barcelona: A Derby Fought with Fire and Quality
The Espanyol vs FC Barcelona derby delivered high-intensity football as Barca won 4-1, moving nine points clear at the top of LALIGA. Lamine Yamal's masterclass, Ferran Torres' brace, and a passionate city rivalry on full display. WEEX, Official Regional Partner of LALIGA in Hong Kong and Taiwan celebrates the beautiful game.

DeAgentAI announced the establishment of the AIA Ecological Fund, focusing on the "AI Agent + Physical AI" track
DeAgentAI has officially established the AIA Ecological Fund, focusing on the new track of "AI Agent + Physical AI," with the first investments in the AliceAI prediction system and ASIC computing power chips.

Why is Crypto Up? Altcoins Lead Due to US Grand Deal
Key Takeaways: The “US Grand Deal” has beefed up crypto’s appeal, impacting assets like Ethereum and Solana. Altcoins,…

Polkadot Hyperbridge Breach Mints Over 1 Billion DOT Tokens
Key Takeaways: Over 1 billion fake DOT tokens were minted due to a vulnerability in Hyperbridge’s Ethereum gateway.…
Bearish Traders Continue to Short Bitcoin | Rewire News Morning Update
Binance Perpetual Contract Funding Rate has been negative for 46 consecutive days, with open interest rising accordingly
Is Nasdaq About to Reach a New High, Is the Bull Market Back?
Almost all assets are up
Goldman Sachs Applies for Bitcoin ETF, Wall Street's Final Bastion Falls
Wall Street has no faith, only a ledger. When the number on the ledger is large enough, any faith will change.
Only Working 2 Hours a Day? This Google Engineer Got His Job Done Using Claude for 80% of It
One File, Three Commands, AI Will Not Replace Programmers, But Will Eliminate Those Who Cannot Set Up a System
Interpreting Stanford's 423-page AI Report: US-China Gap Narrows to 2.7%, Tsinghua's DeepSeek Enters Global Top Ten
This comprehensive 423-page annual report unveils the latest power map of the global AI industry.
YouTube will become the next new type of bank
YouTube will become the next new type of bank. Not because YouTube will apply for a banking license, but because wherever the money comes from, financial services should be there.
