Despite a powerful 22% surge in the S&P 500 since the April lows—driven by easing U.S.-China trade tensions and a 90-day pause on new tariffs—only half of the index’s stocks have managed to rise above their 200-day moving average, indicating a market rally that remains potentially incomplete.
This technical indicator, often used to gauge long-term trends and market breadth, currently shows that just 49.9% of S&P 500 components are in what traders would consider a bullish trend.
That figure remains below both the five- and 10-year averages of 60%, suggesting a wide swath of the market has yet to participate in the rebound.
Breadth Gauge Shows Room To Run
Over the past four years, the percentage of stocks above their 200-day moving average has moved within a wide 10% to 92% range. The extreme lows—seen in June and September 2022 at just 10%—came during periods of heightened recession fears and monetary tightening.
The recent cycle bottom occurred just last month, when the figure dipped to 15% following April’s sharp, tariff-driven selloff.
The highest reading in the last four years came in May 2021, at 92%, during a time of peak post-pandemic optimism. More recently, a high of 82% was recorded in September 2024, following the start of Federal Reserve policy easing.
What Analysts Say About The Tariff Pause and Market Reaction
Analysts say that the 90-day tariff truce announced in April and this week’s truce between the U.S. and China helped revive risk appetite, but they remain cautious about its long-term effects.
In a note on Wednesday, Peter Oppenheimer, strategist at Goldman Sachs, said the outcome was “much better than we had expected,” noting that the tariff levies of 30 percentage points by the U.S. and +5 points by China were significantly lower than prior worst-case estimates.
Oppenheimer also highlighted that the new U.S.-UK trade agreement contributes to a more constructive global growth outlook and has mitigated fears of long-term economic damage from the April drawdown.
He added that the market has begun to price out recession risks.
“Certainly, recent news has been supportive for risk in three respects: it has shown the U.S. Administration to be pragmatic and keen to de-escalate… it suggests a lower likely outcome for the average effective tariff rate… and it has led to a number of growth upgrades,” he said.
Rick Gardner, chief investment officer at RGA Investments, said markets are already “pricing in an environment where the U.S. and China are able to trade with each other,” even if some economic weakness persists.
“Even if we see a continued economic slowdown, the stock market may have already priced that in during the April selloff,” Gardner said.
S&P 500’s Top 20 Laggards – Price vs. 200-Day Moving Average
More than 20 S&P 500 stocks are still trading over 20% below their 200-day moving averages, highlighting substantial technical room for recovery among the index’s biggest underperformers during the tariff-relief rally.
| Company | % Below 200-Day Moving Average |
|---|---|
| UnitedHealth Group Inc. UNH | -42.20% |
| Enphase Energy Inc. ENPH | -41.52% |
| Regeneron Pharmaceuticals Inc. REGN | -30.14% |
| Alexandria Real Estate Equities Inc. ARE | -29.88% |
| Dow Inc. DOW | -28.40% |
| Albemarle Corp. ALB | -27.11% |
| IQVIA Holdings Inc. IQV | -26.14% |
| Bio-Techne Corp. TECH | -24.95% |
| Target Corp. TGT | -24.89% |
| LyondellBasell Industries N.V. LYB | -24.88% |
| Lennar Corp. LEN | -24.48% |
| Teradyne Inc. TER | -24.35% |
| West Pharmaceutical Services Inc. WST | -24.06% |
| Biogen Inc. BIIB | -23.67% |
| Merck & Co. Inc. MRK | -23.18% |
| ON Semiconductor Corp. ON | -23.06% |
| Becton, Dickinson and Co. BDX | -22.80% |
| Halliburton Co. HAL | -22.30% |
| Edison International EIX | -21.76% |
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Image created using artificial intelligence via Midjourney.
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