US stocks rebound strongly: S&P 500 and Nasdaq Index surge; Zweig Indicator triggers buy signal; there is still uncertainty about President Trump's tariff policy.

In the last week of April 2025, the U.S. stock market experienced a strong recovery, with the S&P 500 index increasing by 4.60% and the Nasdaq index jumping by 6.41%, driven by gains in technology stocks. The Zweig Breadth Thrust indicator signaled an improvement in market breadth. However, uncertainty about President Trump's tariff policies persists, which could impact the future market outlook.

Strong Rebound in S&P 500 and Nasdaq Index

Over the past week, major U.S. stock indices have shown impressive performance. The S&P 500 index rose by 4.60%, while the technology-focused Nasdaq index surged by 6.41%. This rally was mainly driven by market expectations of easing trade policies. Notably, after the Trump administration announced a 90-day suspension of reciprocal tariffs on most countries, the Nasdaq index soared by 12.16% in a single day, closing at 17,124.97 points, marking the second-highest single-day gain in history.

In this rebound, tech stocks stood out. Microchip Technology (MCHP), Strategy (MSTR), and Arm (ARM) rose by 27.1%, 24.8%, and 24.2%, respectively, becoming the biggest winners of the day. Meanwhile, exchange-traded funds (ETFs) linked to the Nasdaq index, such as QQQ, QLD, and TQQQ, also benefited, indicating a clear improvement in investor sentiment.

Zweig Breadth Thrust Indicator Triggers Rare Buy Signal

On the technical front, the market has experienced significant developments. On April 24, the Zweig Breadth Thrust indicator was officially triggered. Created by the late market analyst Martin Zweig, this indicator is considered triggered when the proportion of advancing stocks in the market rises rapidly from below 40% to over 61.5% within 10 trading days. This phenomenon has only occurred 19 times since the end of World War II and is historically associated with positive market returns over the next 6 to 12 months.

According to Tom Lee, head of research at Fundstrat, the triggering of the Zweig Breadth Thrust indicator this time is consistent with past historical performance, usually indicating that the market may enter an upward phase. Additionally, in similar past situations, the S&P 500 index has achieved an average 12-month return of 24%, significantly higher than the long-term annualized average return of about 10%.

Uncertainty from Trump's Tariff Policies

Despite positive signals on the technical front, uncertainties remain on the fundamental side. President Trump's recent inconsistent statements on trade policies have become a focal point for the market. According to reports, Trump expressed an intention to "significantly" reduce tariffs on China, but subsequent news indicated that the actual reduction might only lower the rates to the 50%-60% range. This policy ambiguity poses challenges for companies' pricing strategy planning and investment decisions.

Furthermore, Sun Mingde, director of the Economic Forecasting Center at the Taiwan Institute of Economic Research, pointed out that although the U.S.-China trade war seems to be entering a "cleanup phase," it may shift to a "currency war" in the future, posing a potential threat to the stability of global financial markets.

Market experts generally believe that although investor sentiment has improved in the short term, corporate investment and economic activities may still be restrained until trade policies become clearer. Shipping data shows that the number of scheduled ships in early May is expected to drop significantly compared to the same period last year, reflecting companies' cautious approach amid policy uncertainty.

US stocks rebound strongly: S&P 500 and Nasdaq Index surge; Zweig Indicator triggers buy signal; there is still uncertainty about President Trump's tariff policy.

Key Updates

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