Research firm BTIG forecasts a potential rebound for the S&P 500 Index (SPX) in April 2025, following a challenging March. This expectation is based on historical data, which suggests that April often brings relief when March witnesses a drop of more than 3%.
Last month, the SPX was down about 6%. This marked its worst monthly performance since September 2022 and the most difficult March since 2020. The key factors that led to this downturn include tariff uncertainty, lower consumer confidence, and recession fears.
History Suggests Market Rebound
The firm pointed out that since World War II, there have been seven instances where March saw a decline of over 3%. In six of those cases, April ended with positive returns, delivering an average gain of 5.92%. Also, the period from April to December concluded with higher market closings in six out of seven occurrences, with 2001 being the only exception.
While BTIG expects some volatility in April, it believes that the data favors a bullish outcome for the month. The firm also noted a divergence in the Volatility Index (VIX), which did not reach a new high even as the S&P 500 briefly dipped below its March lows. This pattern was last observed in January, before a subsequent rally.
How Do I Invest in the S&P 500 Index?
Investing in the S&P 500 index can be done in several ways, with one of them being through ETFs (exchange-traded funds). These funds replicate the performance of the index and are cost-effective.
Some of the ETFs that provide exposure to the S&P 500 index are SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO).
According to the TipRanks ETF Comparison tool, all three ETFs have a Moderate Buy consensus rating and have an upside potential of over 20%.
