Is it a short-term rebound or a return to a bull market? What do traders think?

Title: Is it a short-term rebound or the return of a bull market? What do traders think?

Author: Lydong Little Worker

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Reposted by: Huoxing Finance

Is this a bull market, or just an illusion?

The S&P 500 has rebounded nearly 10% from its March 27 low, and the Nasdaq is on a ten-day winning streak, setting the longest run of consecutive gains since 2021. Bitcoin has reclaimed the $76,000 level, and crypto-related stocks are rallying across the board. While everyone is still debating whether the war will drag down the economy, the market has already quietly carved out a beautiful V-shaped recovery.

This time, has the bull market truly come back, or is it only a rebound? Even top strategists on Wall Street are far from unanimous.

Bullish camp: the bottom has been confirmed

Tom Lee is one of the most steadfast bulls in this rebound. In an interview with CNBC, he said that the US-Iran ceasefire agreement removes the possibility of large-scale bombing, meaning that “the US stock market’s bottom has already been established.” His logic isn’t complicated: if the S&P 500 can regain the 200-day moving average, the market will likely see a “decisive upward breakout.”

Veteran strategist Ed Yardeni is even more direct. He maintains that the S&P 500 already bottomed out on March 30, with a year-end target of 7,700 points—implying roughly 11% upside from current levels. In an interview with Fortune, he said something thought-provoking: “Pessimism is already outdated.” He even admitted that there are just too many bulls, and that makes him a bit uneasy.

Let’s look at Goldman Sachs’ view next.

They characterize the current phase as “a marathon-style expansion,” led by large tech stocks and then rotating broadly into cyclical and industrial stocks. The year-end target remains at 7,600 points. Their reasoning is that 12% growth in earnings per share forms a “fundamental bottom,” which can limit downside even if the macro environment is volatile. In a report dated April 7, Peter Oppenheimer, Goldman Sachs’ Global Head of Equity Strategy, added that US tech stocks may currently present opportunities for bargain buys, and that AI investment spending will contribute about 40% of the S&P 500’s earnings-per-share growth.

Earnings season is also moving in this direction. FactSet forecasts that Q1 earnings will rise 13.2% year over year, and Barclays has raised its full-year 2026 EPS forecast to $321. Previously, analysts had broadly lowered expectations, and the classic “low expectations, high beat” setup is now in place—something that historically often serves as the ignition for the next leg higher.

Morgan Stanley’s view is highly aligned with Goldman Sachs. Morgan Stanley notes that historically, bull markets typically last five to seven years, and in every bull market in its fourth year, the market has always delivered positive returns. They believe the AI-driven productivity revolution has not yet truly spread beyond large tech stocks, and once that spread happens, it will inject new fuel into the bull market.

Bearish camp doesn’t see it that way

But not everyone is celebrating.

Bank of America’s chief investment strategist Michael Hartnett is the loudest bearish voice in this debate. In a March survey of global fund managers, Hartnett pointed out that the current market positioning indicators have “not yet reached the super-bearish levels seen during recent major lows.” He compared four historical major bottoms: the April 2025 tariff shock, the Russia-Ukraine war, the COVID crash, and the 2011 US debt downgrade. In each case, market indicators were more extremely pessimistic than they are now. His conclusion is that true bottoms usually occur after real capitulation—and that moment has not arrived yet.

Specific data supports his caution: institutional investors still hold 37% more stock than their benchmarks (overweight); cash makes up only 4.3%, far below the 5% buy-signal threshold; and market breadth remains positive. In every true major bottom in history, all three of these indicators pointed in the opposite direction.

He also drew a more pessimistic data comparison: between 2007 and 2008, oil prices rose all the way from $70 to $140, while the subprime mortgage crisis was quietly building beneath the surface. Since the outbreak of the Iran war, oil prices have already climbed by more than 60% in total. Hartnett believes that this kind of price increase harms corporate profits earlier and more deeply than inflation data itself.

In addition, different voices have also emerged from Goldman’s own trading desk. Rich Privorotsky, head of Goldman Sachs’ Delta One business, is more cautious: if oil prices remain above pre-war levels, this rally looks more like a technical rebound from short-covering rather than a trend worth chasing higher. He said that the market’s final arbiter is only one thing: the actual tanker throughput through the Strait of Hormuz, and that data needs time to be verified.

Piper Sandler’s chief investment strategist Michael Kantrowitz is even more extreme. He said uncertainty has been extremely high over the past five years, and investors have become very short-sighted; shifts in consensus often require only a small trigger. For that reason, he simply stopped publishing year-end target prices for the S&P 500.

Where is the real disagreement?

Overall, bulls believe this is a continuation of a bull market supported by fundamentals: corporate earnings are growing, AI-driven productivity improvements are real, and the geopolitical risks eased by the ceasefire are releasing valuation space that had previously been suppressed.

Meanwhile, bears see this as a technical rebound dominated by sentiment repair: short-covering lifts the indices, war risks are only temporarily postponed rather than eliminated, and real capital isn’t flowing in at scale. Over the past week, bond fund inflows were $17 billion, money market fund inflows were $10 billion, gold logged its largest weekly inflow since October 2023, while stock funds saw net outflows of $15.4 billion.

Besides that, there is another variable everyone can’t ignore: developments in negotiations between the US and Iran. The ceasefire deadline is April 22, and the second round of talks has not yet reached an agreement. While merchant tanker traffic through the Strait of Hormuz has improved, it still remains only a small fraction of pre-war levels. Barclays has clearly warned that if oil-price shocks persist, in the worst case the S&P could fall to 5,900 points.

We’re all waiting for an answer. Trump said it is “close to ending,” oil prices fell 4%, and global stocks opened higher. But “close to ending” doesn’t mean it’s already over.

People who believe in good outcomes would surely be happy to see the following sequence: the ceasefire continues, negotiations are concluded as soon as possible, oil prices fall back, and earnings beat expectations—then this rebound would be recorded in history as a new starting point for the bull market. Those who aren’t optimistic might take Hartnett’s words as the truth: “Investors should not mistake a relief rally for a solution to the problem.”

What do you think?