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Let's posit the question succinctly: How low will the Standard & Poor's 500 Index fall?
There's a related question: How near is the index to a bottom from its highs in mid-February?
The answer to the first question is the index may have bottomed on Monday.
That's not clear yet, however. Tuesday's trading will offer a better idea, and it may require a little time for the index bottom to truly reveal itself. Everyone will be watching.
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The setup for the answer starts with these elements:
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The S&P 500 had risen 23.3% in 2024.
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The index had climbed 24.2% in 2023.
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When the index hit its all-time closing high of 6,144.15 on Feb. 19, it was up 4.5% for the year.
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It had climbed 36.4% from its October 2023 closing low.
Lastly, since the Feb. 19 peak, the index has fallen about 8.7%. However, it bottomed on Monday at 5,565 and bounced up nearly 1% to the close, ending the day at 5,614.56, down 2.7%.
The index is now down 4.5% in 2025.
The Nasdaq Composite fell 728 points to 17,468. It's fallen 4% this year. The Dow Jones industrials dropped 2.1%, or 890 points, to 41,912 and is off 1.5% since Dec. 32.
Two big selloffs when in Trump's first term
There is a history of selloffs.
Stocks experienced violent reversals twice during the first Trump administration. The first was in 2018 when the administration began what proved to be a months-long trade dispute with China. The U.S. imposed 25% tariffs on billions of dollars of goods imported from China. China retaliated.
The S&P 500 had peaked that year at 2,940 on Sept. 21. Then, President Trump increased the intensity of his rhetoric even further. By Dec. 24, the index was down 20% from the peak. Right after Christmas, a deal between the U.S. and China was struck, and the S&P rallied 3% that week. The index jumped nearly 8% in January 2019.
The second violent upturn came in April 2020 when the index shot up after vaccines to protect against the Covid-19 pandemic became widely available. The S&P had already fallen a third by March 23, 2020. The jump in April was 12.7%, and the rise from bottom to the end of the year was 53%.
Related: Stock Market Today: Stocks plunge as Trump won't rule out recession risk
Was the market offering signals of turns?
The market does offer signals of when it's overbought or oversold.
One widely watched signal is the relative strength index (RSI). The index is a measure of how fast a stock changes over time.
An RSI reading below 30 says a stock is oversold. A reading below 20 suggests it's so low that a rebound is at hand. In 2018, the S&P 500's RSI bottomed at 19.21 on Christmas Eve.