Particle.news
Download on the App Store
3 ARTICLES
·
2w ago

S&P 500 Faces Rare Technical and Valuation Paradox as Recession Risks Escalate

The index is at a historic technical low while maintaining elevated valuations, with recession fears fueled by tariff uncertainty and declining earnings forecasts.

Image
A view shows the New York Stock Exchange (NYSE) Wall Street entrance in New York City, U.S., April 7, 2025. REUTERS/Kylie Cooper
The forward S&P 500 P/E ratio has fallen dramatically since mid-February 2025.

Overview

  • The S&P 500 is trading 13.2% below its 50-day moving average, a rare technical condition seen less than 0.7% of the time since 1990.
  • Despite the steep market drop, the index's forward price-to-earnings ratio remains high at 18.3x, signaling valuations are still elevated compared to historical downturns.
  • National Economic Council Director Kevin Hassett suggested President Trump may consider a 90-day tariff pause for all countries except China, though details remain unclear.
  • JPMorgan CEO Jamie Dimon warned that newly imposed tariffs could exacerbate inflation and increase recession risks, with his bank now predicting a 60% chance of a U.S. recession by year-end.
  • Analysts note that Wall Street has yet to fully price in a potential recession, with current valuations and earnings forecasts still appearing overly optimistic.