The S&P 500's Relative Order Continues

The S&P 500 has sustained a mostly orderly, upward trend since the end of 2023.

That's a really strange thing to consider because the index nearly saw order within the market break down in early 2025. The first leg down toward chaos came with the unveiling of China's DeepSeek AI system on 19 February 2025 deflated whatever bubble had been forming among U.S. tech companies in response to the potential for artificial intelligence technologies. It took a month for the overall index to show signs of stabilization.

The DeepSeek shock was followed by President Trump's 2 April 2025 "Liberation Day" global tariff announcement, which sent the index stocks plunging by a similar amount. Had it lasted longer, the one-two punch of these two hugely negative shocks would have broken the state of relative order that had become well established going into mid-February 2025. But order didn't break down, as the shocks proved to just be short-lived outliers. The S&P 500 recovered from the shocks and has since continued to grow, which you can see in the following chart.