Tariff Shock Fadeout: Wall Street Scrambles After Market’s Surprise Rebound

​Just weeks ago, it looked like tariffs had punched a hole in the market’s momentum. Now? Stocks are charging back—and Wall Street’s still catching its breath.

After President Trump rattled investors with a new wave of aggressive tariffs in April, the S&P 500 tumbled—but not for long. In a stunning reversal, the index is now up nearly 12% from its April 8 low, notching its best eight-day winning streak since 2020​.

And here’s the twist: retail traders were the ones who saw it coming.

While institutional investors sat on their hands—burned by volatility and wary of the macro mess—individual traders dove in, even embracing leveraged ETFs to amplify gains. That high-conviction dip-buying was rewarded, while many professionals missed the rally entirely.

Nomura strategist Charlie McElligott called it “the rebound nobody wanted”—except the retail crowd, who bet against the fear.

So what turned the tide?

Several contrarian signals were blinking bright green. The relative strength index (RSI) and MACD pointed to oversold territory. The CBOE Volatility Index (VIX) spiked above 50—its highest since 2020—before retreating. And the AAII sentiment survey showed extreme bearishness, historically a launchpad for rebounds.

Then came a major technical trigger: a Zweig Breadth Thrust, a rare pattern known to precede strong rallies. Add in a brief tariff pause from Trump, and suddenly sentiment flipped.

Amazon and Microsoft’s earnings wins helped fuel the surge, but this bounce wasn’t fundamentally driven. Many strategists, including Michael Lebowitz of RIA Advisors, believe the rally is “purely technical” and unlikely to last without progress on trade.

Even so, historical patterns suggest fast selloffs often snap back just as quickly—just as they have here.

Bottom line:
​The market’s not out of the woods yet—but for now, retail investors are the ones grinning, while the pros play catch-up. Tariff turmoil may not be over, but neither is the fight for momentum.