On April 3, 2025, Wall Street investors were gripped by fear.
The U.S. stock market saw a major meltdown, with the S&P 500 plunging -4.8% in a single day. The Magnificent 7 — the market’s previous leaders — tumbled as much as 10%, sparking a wave of panic.
Market uncertainty always raises difficult questions:
“Will it fall further?”
“Should I sell now?”
“Is this a buying opportunity?”
But in moments like this, when fear takes over, a clear strategy and data-driven thinking matter most.
What the Data Says
Looking back at 25 years of market history, two key signals offer perspective:
1. U.S. 10-Year Treasury Yield Drops >20bps (Weekly Basis)
This has occurred 52 times over the past 25 years.
Result? 12 weeks later, yields were higher in 50% of cases and lower in the other 50% — a coin toss.
In short: Rate moves provide no clear directional edge from here.
2. S&P 500 Weekly Gap Down >3%
There were 104 such instances since 2000. One month later, markets recovered in 55 cases (53%) and fell in 49 (47%). Again, the split is nearly even.
Conclusion: The market is sending one message — prepare for both directions.
Scenario 1: Tactical Buy for a Quick Rebound
If this sharp drop turns out to be a short-term correction, then history is on the bulls’ side.
After a 3%+ weekly drop, the S&P 500 gained +1.2% on average over the next month.
After breaking below the Donchian channel top, the average return was +2.4% over the next month.
If this is just a storm passing through, this might be a strategic buying opportunity — consider averaging into index ETFs or high-quality growth stocks.
Scenario 2: A Deeper Downturn — Go Defensive
If this is the beginning of a true economic downturn, it’s time to pivot to recession-proof names. The following six stocks have historically held up well during past market sell-offs:
Erie Indemnity (ERIE) – Stable earnings from insurance operations.
Coterra Energy (CTRA) – Resilient performance during energy-driven shocks.
Hormel Foods (HRL) – Consumer staples with defensive demand.
Merck & Co (MRK) – Pharma giant with low economic sensitivity.
Amgen (AMGN) – Biotech leader with robust fundamentals.
Hershey Foods (HSY) – Consumer goods brand with strong pricing power.
Historical Performance During Market Downturns:
Q4 2018 (Trade War, S&P -14%): ERIE +4.5%, HRL +8.3%, MRK +7.7%, HSY +5.1%
2020 COVID Crash (S&P -12.5%): CTRA +23.4%, HRL +12.1%, ERIE +3.7%
2022 Rate-Hike Recession (S&P -19.4%): MRK +44.8%, CTRA +29.3%, HSY +19.7%, ERIE +29.1%
If recession takes hold, rotating your portfolio into defensive winners is a proven strategy.
Bottom Line: Let Data Drive Decisions
This may feel like a moment of chaos, but it’s also a moment for rational, data-backed strategy.
Whether preparing for a bounce or bracing for a downturn, the key is not to panic — but to stay disciplined and allocate based on what the data tells us.
Because in every crisis, there is always opportunity — if you're prepared.
[Compliance Note]
All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.
The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.
Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
