NEW YORK — The S&P 500 closed Monday at 7,550, up 2.3 percent, recovering 85 percent of last week's losses in a single session. The Nasdaq-100 climbed 3.54 percent, its best day in 18 months.
The rally follows a brutal Thursday when the S&P 500 fell 4.36 percent—its worst day since April 2025. The index had closed last week at 7,376.86, down 5.65 percent from its Oct. 6 record of 7,818.93. Monday's bounce recovered 51 percent of Thursday's losses for the S&P 500 and slightly more than half for the Nasdaq-100, though the Nasdaq-100 remains more than 10 percent below its record.
Historical precedent offers no clarity. Since 1999, sharp one-day rallies during corrections have been common regardless of whether they mark a bottom. Of 14 corrections with single-day S&P 500 gains exceeding 2 percent from a significant low, nine saw the entire bounce reversed within a month. But eight of 13 similar instances posted higher prices one year later.
Morgan Stanley's Mike Wilson told CNBC the correction is in its "final innings." He projects an S&P 500 bottom between 7,100 and 7,300, with a rally to 8,000 by year-end. JPMorgan's Dubravko Lakos-Bujas called the pullback "largely a deleveraging event" and maintained his 8,000 year-end target. HSBC's Max Kettner, who had reduced stock exposure before the midterms, is now adding back holdings.
Barron's advised against buying the bounce. InvestorPlace's Luke Lango examined past chip-index breakdowns similar to last week's and found split outcomes: seven instances led to an average 14 percent gain, while six evolved into bear markets averaging a 28 percent loss—a coin flip.
For a 62-year-old who rolled a 401(k) into an IRA last week with $1.3 million, the timing presents a real problem. The cash landed Friday, missing both Thursday's drop and Monday's rebound. With a planned 60-40 stock-to-bond allocation, $780,000 is earmarked for an S&P 500 index fund to support $48,000 in annual withdrawals (3.7 percent of the balance) until Social Security begins at 67. A dollar-cost averaging approach—deploying one-third now and the remainder over the next two months—hedges the timing risk.
