Despite an upward move in the latter half of the trading day on April 7, the Dow Jones Industrial Average (DJIA) moved sharply downward on April 8, and closed below the open seen on so-called ‘Black Monday’ of 2025.
Dow futures paint an even grimmer future going forward.
To be precise, Dow futures have fallen by 2.01% on the daily chart, having shed 762 points as of press time on April 9.
With these latest developments (and recent market volatility) in mind, analysts are increasingly turning bearish, warning that the moves to the upside are not, in fact, signs of recovery — but a phenomenon referred to as a dead cat bounce, or, less colorfully, a sucker rally.
Is the latest short-lived rebound a dead cat bounce?
In all likelihood — yes. A lot of the upward momentum seen on April 7 can be attributed to a fake news headline about a potential tariff pause. The fundamental drivers behind the downturn have now shifted.
While there are some countries that are trying to negotiate a deal that would see the tariffs placed on them by the Trump administration dropped, bulls that are pinning their hopes on this development are most likely in for a significant disappointment. Reshoring industries and dropping the tariffs are two goals that are at odds with each other — and the administration cannot accomplish both at the same time.
Moreover, the world’s second-largest economy, the People’s Republic of China, introduced a retaliatory 84% tariff on American goods. Potential deals on one side, and real escalation on the other — on the whole, the trade war is intensifying, not calming down.
At present, all signs point to a protracted dispute — one which will disrupt supply chains, increase the cost of imports, and most likely lead to a recession. Putting stock in a short-term rally in the midst of a market-wide bearish turn is, unfortunately, nothing but wishful thinking.
However, it is important to remain rational. Not all assets will (or indeed, have) suffered amidst this downturn. In terms of futures, as volatile as the cryptocurrency market is, it is experiencing renewed optimism on account of being tariff-proof — but in the near term, equity futures will likely experience further losses.
Featured image via Shutterstock
