This past Tuesday marked the five-year anniversary of when the World Health Organization declared the COVID-19 outbreak to be a “pandemic.”
Following the news, investors panicked and the markets crashed. While this was five years ago, I want to bring this up today because the folks at Bespoke Investment Group recently pointed out that the S&P 500’s actions over the past three weeks have been eerily similar to the same three-week period in 2020.
You may recall that the S&P 500 peaked and hit a new all-time high on February 19, 2020, then plunged for three weeks. In 2020, the S&P 500 lost more than 19% during those three weeks as the COVID-19 pandemic and lockdown intensified.
Now, I want to remind you that the same three-week period in 2025 has been terrible – but not nearly as horrible as 2020.
Consider this: The S&P 500 peaked and broke through to a new all-time high on February 19, 2025. Since then, the index dropped by about 10% by yesterday’s close, officially ending in “correction” territory. Now, a bounce back in the markets today may pull it out… for now, at least.
But the tech-heavy NASDAQ has been in full-blown correction territory for a few days now.
The point is, whether we’re talking about 2020 or today, one thing is clear: Uncertainty is the source of the selling.
Today, we’re once again looking at a grossly oversold stock market – and I know that you’re wondering if and when a rebound will occur.
Well, it could be happening now. The markets closed on an incredibly positive note today. But stocks often bounce back – by a lot – in market corrections before retesting lows.
So, in today’s Market 360, I’d like to take some time to talk about what corrections are, why the markets have been selling off lately and why you shouldn’t panic. Then, I’ll explain the catalyst that I think will turn this market around, starting next week…
What Do We Know About Market Corrections?
So, what exactly is a correction? Simply put, a market correction happens when the value of a stock, bond or index falls more than 10% from its most recent high. This differs from a crash, which is a sharp double-digit drop in prices in a single day or week. A correction essentially signals that investors want out of the market.
But the fact of the matter is this – a correction is not a rare occurrence; it’s actually quite common. On average, the S&P 500 experiences a correction once every year and a half, though it has been happening a lot more frequently in the past few years.
The folks at Bespoke Investment Group recently noted that the NASDAQ closed more than three standard deviations below its 50-day moving average on Monday, March 10.
The 50-day moving average is the index’s average price trend over the last 50 days. A “standard deviation” measures how much prices normally move up or down from that average.
Closing more than three standard deviations below means the drop was way bigger than usual – a rare event that suggests extreme selling pressure.
But here’s the thing to keep in mind, Bespoke also pointed out that any time the NASDAQ reaches a deeply oversold level, it is due for a bounce. In fact, Bespoke reports that in the previous instances where the NASDAQ closed three or more standard deviations below its 50-day moving average, the index produced gains 90% of the time in the following year.
In other words, the recent correction actually bodes well for future strength. So, I’m not very concerned, and you shouldn’t be, either.
Now, before we dive into how you should navigate a correction, let’s first take a look at what started the NASDAQ’s correction this year.
What’s Behind This Correction?
Now, one of the reasons for the NASDAQ’s big drop this week was due to Apple Inc. (AAPL) postponing artificial intelligence upgrades to Siri. The update is now not expected to roll out until 2026, though no exact timeline was set.
But let’s not kid ourselves, folks. While the Apple announcement certainly weighed on tech stocks, the primary reason for the ongoing market weakness is tariff and economic fears.
On Wednesday, Trump 2.0’s latest round of 25% tariffs were implemented on steel and aluminum imports. The European Union (EU) and Canada both responded with their own tariffs, matching the U.S.’s tariffs dollar for dollar. The EU reimposed tariffs from President Trump’s first term, as well as added new industrial and agricultural goods to the list in an effort to match the U.S. tariffs. Canada plans to impose counter-tariffs on about $20.8 billion of U.S.-made goods.
Tariffs are a big concern for investors because most think they could spark inflation and halt economic growth. In fact, the Atlanta Fed now expects the U.S. economy to contract 2.4% in the first quarter. Couple that with President Trump’s comments that there will be short-term pain, and investors have fled the market as a result.
As this “tit for tat” continues, this is a good time to remind you that the stock market is a manic crowd. Remember, crowds do not think; they merely react – and that’s what we’ve seen play out day after day and week after week.
Since many investors are worried about tariffs, I think it is important to look at the big picture. As a matter of fact, I discussed tariffs and our Commerce Secretary when I appeared on Fox Business last week. In short, I reiterated what I have been saying for months, which is that Commerce Secretary Howard Lutnick will largely be imposing retaliatory tariffs if our trading partners do not lower their tariffs and/or agree to onshore more of the manufacturing in America.
As far as China is concerned, the reality is they are grappling with deflation and a horrible long-term demographic future. And this, combined with our strong dollar, means that you will probably not notice any inflation on goods from China.
The financial media only adds fuel to the fire. Investors are being misinformed by the financial media that have a vested interest in scaring investors to boost their ratings. In other words, tariffs are the financial media’s new boogeyman. The negative cycle they create tends to feed on itself. In the end, I cannot fix this. But what I can do is remind you that this has virtually nothing to do with growth stocks – especially fundamentally superior growth stocks.
Growth stocks, especially small-cap growth stocks, are largely immune to tariffs. What’s more, they benefit from falling interest rates. We’ll cover the latest inflation news and how that will impact the Federal Reserve’s key interest rate decisions in tomorrow’s Market 360. But for now, I will repeat what I have been saying all year, which is that we are in the beginning of a global interest rate collapse.
The economic picture in much of the rest of the world, from Germany and France to China, is lousy.
Why NVIDIA Should Help the Market Rebound
The market may continue to oscillate in the near term, and I wouldn’t be surprised if we see a retest of the recent lows before a significant rebound ensues.
But the bottom line is we’re going to be just fine.
If historical precedence holds true, the market will turn and trek higher. In fact, it could begin heating up as soon as next week…
That’s because this is when NVIDIA Corporation (NVDA) will be hosting its AI Conference for developers.
And on March 20, NVIDIA is holding its first-ever Quantum Day as part of its annual AI Conference.
According to the company, “Q-Day” will bring together industry leaders, developers and partners to explore the future of quantum computing.
Live sessions. Deep dives. Discussions on what’s happening right now – and where the industry is headed.
Yesterday, I sat down to give a full, detailed briefing on what I expect to hear from NVIDIA’s Q-Day event on March 20. You can check it out here. But in short, I expect a major announcement to be made related to quantum computing – which is the next frontier of the AI Revolution.
You’ll learn about the small-cap quantum computing stock perfectly positioned to profit from NVIDIA’s quantum push. This company holds 102 patents and already works closely with NVIDIA, Microsoft Corporation (MSFT), Amazon.com Inc. (AMZN) and NASA.
Don’t wait until the market fully catches on. Watch the replay of my Next 50X NVIDIA Call now for all the details – before it’s taken down.
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)