‘Bull market isn’t broken yet’—Fed’s remarks fuel Wall Street hopes for stock market rebound

Federal Reserve Chair Jerome Powell’s upbeat remarks on the U.S. economy Friday may have given investors an “excuse” to buy stocks, said Nathan Peterson, director of derivatives analysis at Charles Schwab.

“While I don't think we're done with volatility in March, today's price action is encouraging—at least from a near-term trading perspective,” Peterson wrote.

He remains bullish for the week ahead, barring negative surprises from upcoming economic data.

The S&P 500 dipped below its 200-day moving average on Thursday and Friday but managed to recover, closing above the key level. The Dow Jones also saw a brief drop below its 200-day average before rebounding by the end of the week.

The Nasdaq, however, struggled, falling 3.5% for the week, while the Russell 2000 index posted a 4.2% decline by Friday’s close.

That drop may prove temporary, argued Fairlead Strategies founder Katie Stockton, pointing to October 2023 when a similar move turned into a buying opportunity.

“The bull market isn’t broken yet,” Stockton said. “We’d want to see a couple of weeks below that support before making that call.”

She emphasized that the moving average serves as a cushion rather than a hard floor.

Despite Friday’s rebound, the S&P 500 lost 3.1% last week—its worst since September 2024—while the Nasdaq fell 3.5%, marking its steepest weekly decline since October 2023.

What’s ahead this week

A flurry of reports due this week could shape the stock market's next move.

• Wednesday (8:30 a.m. ET): The Consumer Price Index (CPI) will provide fresh insight into inflation pressures on households.
• Thursday (8:30 a.m. ET): The Producer Price Index (PPI) will reveal inflation trends for businesses.
• Friday: A government shutdown deadline looms, with Republicans needing at least eight Democratic votes to pass their proposed budget.

Peterson warned these events carry significant weight, and if they come in worse than expected, they could trigger another market sell-off.

“If next week's inflation reports come in hot or Congress fails to resolve the funding gap, stocks could face another wave of selling pressure,” he wrote.