April was the best month ever for the Vanguard S&P 500 ETF (VOO), which pulled in $20.9 billion in net inflows, the fund’s largest intake in the fund’s 15-year history.
That figure was more than triple March’s $6.4 billion and ranks as the fifth-largest monthly haul for any ETF on record, according to Bloomberg.
Much of that was driven by retail traders trying to buy the dip after a brutal start to the month, according to The Kobeissi Letter.
“FOMO is resurfacing,” the newsletter wrote, pointing to record retail buying levels.
Markets opened April in chaos, with President Trump’s “Liberation Day” tariffs sparking a $5 trillion sell-off in just two days.
But since bottoming on April 7, the S&P 500 has rebounded nearly 13%, trimming its year-to-date losses to just 4.3% — a dramatic reversal from the nearly 17% slump seen in early April.
The recovery coincided with a collapse in the CBOE Volatility Index (VIX), which dropped 50% in April — its second-biggest monthly plunge in history, noted analyst Charlie Bilello.
Dead cat bounce or new bull market?
Wall Street remains split on whether the rebound signals a true market bottom or a dead cat bounce.
Veteran investor James “Rev Shark” DePorre called the rally a “record-setting bull trap,” pointing to the extreme volatility that followed Trump’s tariff surprise.
But not everyone is sounding alarms. Strategists at Morgan Stanley, for example, argue the comeback in stocks has legs.
After briefly breaching the lower bound of the firm’s projected trading range, the S&P 500 bounced back in a move they see as a “tradable rally” led by beaten-down cyclicals, low-quality names, and pricey growth stocks.
“Current levels should provide a tradable rally,” wrote a team of analysts led by Michael J. Wilson.
While Trump’s first 100 days have shaken confidence, Morgan Stanley believes investors will soon shift focus toward the more market-friendly parts of his economic agenda.
Signs of de-escalation are already emerging. The administration confirmed it plans to meet with Chinese officials in Switzerland to restart trade talks.
The first goal is “a mutual agreement” on how to “build off-ramps from the complicated relationship that we’re in right now when it comes to trade,” a senior official told Politico.
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