Chart analysts are worried the S & P 500 will be the next to join the Nasdaq Composite in a bear market if the tariff-related headwinds fail to abate. The stock market took a pummeling this week , with the Nasdaq set to close Friday in bear market territory — which is typically defined as a move of 20% or greater from a recent peak. The tech-heavy index was last 22% off its all-time high. The S & P 500 could be the next to go, if it fails to hold a critical support level at around 5,200 — which represents the August 2024 low — through Friday. On Friday, the benchmark — which was hovering around 5,130 — is about 16% off its own record high after China retaliated to U.S. tariffs with levies of its own on American goods. “I don’t want to sound too negative, but if [traders] don’t show up, then we are looking at a potential for a very rough week next week,” said JC O’Hara, chief technical strategist at Roth MKM. “If we receive this avalanche of negative news — or news that’s interpretive as negative over the weekend — we could see a dramatic, scary fall on Monday at the open,” O’Hara said. “I’m not forecasting that, but I think that when you’re looking at risks and rewards, I think that’s the largest risk.” A steep fall could mean S & P 500 futures could test 4,850 — a level representing a bear market — if they fail to hold 5,200. A move to 4,850 in the underlying index would put it about 21% below its February record. .SPX YTD mountain S & P 500 year to date There are reasons to be worried of further downside over the near term, including the rare occasion of the S & P 500 on pace to post two back-to-back sessions of 4% declines, O’Hara noted. Historically speaking, that has preceded more selling during significant periods of market dislocations, he said. This happened in March 2020, during the onset of the coronavirus pandemic, and in November 2008, during the financial crisis. “A lot of people will say two back-to-back 4% decline days, that should be enough to invite buyers,” O’Hara said. “It actually scares the masses, and you do ultimately get one more leg lower, before the ultimate low is made. So, it’s that one more leg lower that I think could happen next week.” “We’re at a sentiment low in the market. We just need to find the price low, which is capitulation,” he added. “And I don’t know if we’ve seen capitulation just yet.” Still, Oppenheimer’s Ari Wald thinks the stock market is getting pretty close to a capitulation. He cited the CBOE Volatility Index (VIX), which topped 40 on Friday after closing at 30 on Thursday. A reading above 20 typically indicates elevated fear in markets. .VIX 5D mountain VIX “We’re getting close to capitulation,” Wald said. “For this to be a bear market for us, which is a case that we’ve been talking about for 2025, I think it probably has to last through for the coming quarters, even where there should be some additional ups and downs along the way, and even lower lows on top of that.” However, he said gains are likely capped all the way up to the S & P 500’s 200-day moving average over the coming quarter. The benchmark’s 200-day average of 5,760.42 is more than 13% above where it traded Friday afternoon. “We’re not out of the woods just yet. I think just we overshot to the downside, but the damage has been done and it’s going to require time to get out of it,” Wald said. Week ahead calendar All times ET. Monday, April 7 3:00 p.m. Consumer Credit (February) Tuesday, April 8 6:00 a.m. NFIB Small Business Index (March) Wednesday, April 9 10 a.m. Wholesale Inventories final (February) 2 p.m. FOMC Minutes Earnings: Constellation Brands, Delta Air Lines Thursday, April 10 8:30 a.m. Consumer Price Index (CPI) (March) 8:30 a.m. Hourly Earnings final (March) 8:30 a.m. Average Workweek final (March) 8:30 a.m. Initial Claims (04/05) 8:30 a.m. Treasury Budget (March) Earnings: CarMax Friday, April 11 8:30 a.m. Producer Price Index (PPI) (March) 10 a.m. Michigan Sentiment preliminary (April) 11 a.m. New York Federal Reserve Bank President and CEO John Williams speaks on Economic Outlook and Monetary Policy, Puerto Rico Earnings: Morgan Stanley , Wells Fargo , JPMorgan Chase , Fastenal , The Bank of New York Mellon , BlackRock Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange!| Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
