“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” Sir John Templeton
Over the last, few weeks things have gotten messy on Wall Street. Trump’s “Liberation Day” proclamation saw steep declines across all major indices. The morning after Trump outlined his plan for reciprocal tariffs on the world, the fallout was pronounced:
- Japan’s benchmark Nikkei 225 index closed 2.8% down
- South Korea’s Kospi index closed 1% lower
- Hong Kong’s benchmark Hang Seng Index closed 1.5% down
- Europe’s Stoxx 600 index was trading 1.3% lower
- France’s CAC was 2.1% down
- London’s FTSE 100 had fallen 1.3%
- Dow futures were 2.5% down
- S&P 500 futures 3% lower
- And the Nasdaq was set to open 3.3% lower.1https://www.cnn.com/business/live-news/tariffs-trump-news-04-02-25/index.html
But even before then, things were looking fairly bearish. Over the past six months, the Dow, S&P and Nasdaq are down — 5.5%, 7.2% and 8.15% respectively.
According to Business Insider, a “Bull Market” is when stocks steadily rise, usually during the expansion phase of the business cycle. Bull markets are usually accompanied by high investor confidence and a strong overall economy.2https://www.businessinsider.com/personal-finance/investing/what-is-a-bull-market A “Bear Market,” however, is when an index such as the S&P 500 or the Dow has fallen 20% or more from a recent high for a sustained period of time. And now a host of experts are making bear market predictions, prognostications and rather dire projections.
On April 4th the Nasdaq and Russell 2000 both tumbled into “bear territory” while the Dow entered a correction and the S&P 500 sat on the very edge of a beardom.
Bear Market Insights from the Pundits & the Experts:
The Associated Press:
“Wall Street could soon be in the claws of another bear market as the Trump administration’s tariff blitz fuels fears that the added taxes on imported goods from around the world will sink the global economy. The last bear market happened in 2022, but this decline feels more like the sudden, turbulent bear market of 2020, when the benchmark S&P 500 index tumbled 34%.”3 https://apnews.com/article/bear-market-stocks-market-tariffs-trump-sp-500-c5d106a80666c0ff4f0e71624d525158
USA Today:
“President Donald Trump’s historic tariffs have left a trail of troubling recession signals, including tumbling consumer confidence, rising business uncertainty, and a flurry of layoff announcements. A potentially more worrisome threat emerged Monday – a bear market.”4https://www.usatoday.com/story/money/2025/04/08/bear-stock-market-recession/82975909007
JP Morgan:
“The bears have been taking a victory lap to start the year. The S&P 500 is off to its third-worst start to a year in the last 15. Softer economic data (purchasing manager surveys, consumer sentiment and homebuilders’ sentiment) has emerged, and consumer inflation expectations have risen. The bears would argue that tariff escalation on April 2 will exacerbate both. The tax on goods will be stagflationary, further driving up inflation while continuing to weigh on growth. That could leave the Fed in a difficult situation to manage their dual mandate of stable prices and maximum employment.”5https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-the-bull-side-the-bear-side-and-the-reality
Barron’s:
“Wall Street’s strategists have been busy cutting their price targets on the benchmark index, bringing it down to 6430 from 6500 at the time of the cover. Barclays, the latest to take its numbers down, now sees the S&P 500 finishing the year at 5900. Retail investors, too, are exceedingly pessimistic: The percentage of bears in the AAII survey has topped 50% for five consecutive weeks, the longest since a five-day streak ending Oct. 20, 2022, near the bottom of that year’s bear market.”6 https://www.barrons.com/articles/stock-market-outlook-rethink-trump-tariffs-federal-reserve-policy-5776184b
Suze Orman:
“Expert Suze Orman has been doing her best to offer comfort as the stock market went into freefall over the second week of April, but even she suspects we are headed for a “bear market,” as she wrote in a recent Facebook post … ‘A bear market often reflects reduced confidence in the economy, investor pessimism and can signal economic downturns and even recessions.’”7https://finance.yahoo.com/news/suze-orman-sees-bear-market-150137988.html
The current bull market is now more than two years old and facing significant headwinds from Trump’s tariff disruptions, a looming economic slowdown, declining consumer sentiment, mounting federal debt, and highly overvalued stocks.
Do Bear Markets Precede a Recession?
Bear Markets aren’t always a precursor to a recession, but they usually are. According to an analysis by CRA Research and Moody’s Analytics, nine of the past 14 bear markets since World War II have been followed by recessions within an average of six months.8https://www.usatoday.com/story/money/2025/04/08/bear-stock-market-recession/82975909007
There are three different bear markets that inflict varying levels of economic discomfort:
- Cyclical bear markets are tied to the normal business cycle and economic contractions. These typically last an average of around two years and take about five years to fully rebound to their starting point. These are the most common type of bear markets and often present buying opportunities for long-term investors who can weather the volatility.
- Event-driven bear markets are triggered by specific, often unexpected occurrences such as wars, pandemics, or oil price shocks. These tend to be shorter, lasting around eight months, and recover in about a year. The COVID-19 market crash of 2020 is a recent example of an event-driven bear market that saw a remarkably swift recovery.
- Structural bear markets are the most severe, resulting from fundamental economic imbalances and financial bubbles. The 2008 financial crisis and the dot-com crash of 2000 were structural bear markets. These can take many years to fully recover from and often lead to significant regulatory and economic reforms.9https://www.forbes.com/sites/robertdaugherty/2025/04/12/how-long-do-bear-markets-and-recessions-typically-last
Why Gold is Safe to Hold
Gold is clearly the beneficiary of the current tariff and trade uncertainty, but it is also a traditional store of value and a “safety net” for bear market panic, pain and Wall Street’s “wall of worry.” Remember, it is negatively correlated to equities and stocks lose 35% on average in a bear market.10https://www.morningstar.com/news/marketwatch/20250412209/im-5-years-from-retiring-and-moved-my-money-into-non-us-stocks-was-that-a-big-mistake
When bearish sentiment overtakes the markets, emerges as the asset of choice for investors looking to quickly diversify their savings and retirement accounts. It is a safeguard, a shock absorber and a hedge. Holding gold during steep and prolonged market declines helps you protect your portfolio value and preserve your personal wealth.
So as the current the “bear” lumbers out of hibernation — and it is fed and nourished by trade wars, overvaluation, sinking consumer sentiment, heightened volatility, and historic U.S. debt — gold is one of the few safe places to hide from a large, hungry, sharp-clawed carnivoran.
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1 https://www.cnn.com/business/live-news/tariffs-trump-news-04-02-25/index.html
2 https://www.businessinsider.com/personal-finance/investing/what-is-a-bull-market
4 https://www.usatoday.com/story/money/2025/04/08/bear-stock-market-recession/82975909007
7 https://finance.yahoo.com/news/suze-orman-sees-bear-market-150137988.html
8 https://www.usatoday.com/story/money/2025/04/08/bear-stock-market-recession/82975909007
