Trading results for 4 April 2025

In our previous review, we called Thursday a “red-letter day” – with a timid hope that the sell-off would not continue and that the market crash would remain a local reaction to the new tariffs announced on Wednesday. However, the “Trump-era innovations” turned out to be so significant and epoch-making that it is now clear: one minor sell-off was never going to be the end of it.

Last Friday we felt it sharply and painfully. The sell-off spread across the board, hitting absolutely every economic sector and almost all securities. What more is there to add? The statistics speak for themselves: of the 503 stocks in the S&P 500 index, only 14 ended the day in the green.

Things were even worse in the Dow Jones index (DJIA-30), where just one single company finished the session in positive territory. That hero was Nike (NKE, +3.00%). It is also worth noting that the decline was relentless: prices fell steadily throughout the main trading session with no real rebounds, and the session closed at the day's lows. All this unfolded with truly massive volumes, comparable only to those seen on options expiry days (Quadruple Witching) or during the market collapse at the height of the COVID panic in March 2020.

After two days of mass selling, we naturally ended up with rather disheartening results. For the past week, the losses of the leading U.S. indexes were: -7.86% for the Dow Jones, -9.08% for the S&P 500, and -10.02% for the NASDAQ Composite. Perhaps the most alarming statistic is that the NASDAQ Composite has officially entered a “bear market”, having lost more than 20% from its all-time high. Since its peak on 16 December 2024, the index has fallen by 22.73%.

The 20% mark is a key threshold in technical analysis – once breached, it signals the end of one trend (in this case, an upward one) and the beginning of a new downward movement. The other two indexes – Dow Jones and S&P 500 – fortunately have not yet crossed this line, having fallen 14.88% and 17.42% respectively from their all-time highs (ATH). But as we can see, another day or two of similar sell-offs – and they too may find themselves on the path of decline.

As for the ITS family of indexes, the recent days’ sell-off has not spared them either. Thanks to strong geographical diversification, the ITS World index (ITSW), which tracks global companies, fared slightly better, with weekly losses of 8.62%.

However, it is important to understand that the sell-off extended far beyond the U.S. market, affecting all the world’s major stock exchanges. There were no safe havens left – nowhere to hide. The ITS Shariah index (ITSS), which is fully based on American assets, suffered heavier losses – down 9.72% for the week.

Summing up the past week, one can say with certainty: the market has entered a new phase. And this phase is a correction. How deep and how long it will last remains an open question. However, we are likely to get some answers as early as this week – following the release of key macroeconomic data on consumer inflation, as well as the first Q1 2025 earnings reports.