U.S. stocks rebounded strongly on Monday, with several Wall Street institutions stating that the most severe sell-off in U.S. stocks has passed

After experiencing the fastest decline in U.S. stock market history, U.S. stocks saw a broad rally on Monday, benefiting from the Trump administration's indication that the tariff policy announced on April 2 will be more "targeted."

Wall Street analysts expect that investors may soon have a breather. Stock strategists from institutions such as JP Morgan, Morgan Stanley, and Evercore ISI stated that various indicators, including investor sentiment, positioning, and seasonal factors, suggest that the most severe phase of the recent downturn in the U.S. stock market may have passed.

However, it is important to note that although strategists believe the U.S. stock market is about to enter a calm period, most have not explicitly advised clients to fully bet on the U.S. stock market at this time. Currently, uncertainty surrounding trade policies still looms over the market, and there are ongoing concerns that enthusiasm for artificial intelligence may have inflated technology stock valuations. There remains a divide on Wall Street regarding whether to "buy the dip."

Market worries that Trump's tariffs will exacerbate inflation and hinder economic growth, combined with concerns about an excessive rise in AI-driven technology stocks, have led to a significant correction in U.S. stocks since mid-February. The S&P 500 index experienced its seventh-fastest 10% pullback in nearly 100 years, erasing over $5.6 trillion in market value.

JP Morgan strategist Dubravko Lakos-Bujas stated:

Most of the decline came from the previously strongest stocks—the 50 best-performing stocks in the S&P 500, which erased gains from the past two years within three weeks. Meanwhile, this has alleviated the overcrowding in these stocks. Therefore, the risk of another sharp pullback in the short term should be relatively low.

Morgan Stanley's well-known strategist Michael Wilson also shifted to a more optimistic tone, noting:

Seasonal factors, a weaker dollar, declining U.S. Treasury yields, and extremely pessimistic market sentiment and the latest positioning are paving the way for a tradable rebound in the short term.

Focus on employment, manufacturing data, and earnings expectation adjustments to determine whether a "more sustainable rebound" is forming.

Evercore ISI's Chief Equity and Quantitative Strategist Julian Emanuel stated:

The Trump administration's comments on the U.S. economy have reset expectation thresholds, leading to extremely pessimistic market sentiment. We believe that the previous step-back phase is gradually coming to an end, and the next phase may be a step forward, with prices rising further.

The reciprocal tariff policy that Trump plans to announce next month may again change investors' expectations regarding economic impacts. This is the next catalyst for the market.

Dennis DeBusschere, Chief Market Strategist and President of 22V Research, stated on Monday:

Improvements in the internal structure of the market indicate that the U.S. economy is not heading toward recession. Given that economic data remains robust while investor sentiment is unusually low, if the impact of tariffs turns out to be minimal, the market may see returns stronger than normal over the next month, three months, and six months.

We will wait for more clear information regarding tariffs before making a judgment. Assuming tariffs do not become a significant obstacle to economic growth, fundamental factors should gradually recover by 2025. However, we are not very confident that tariffs will not have serious negative impacts, so we will wait until the announcement on April 2 to decide whether to advance this long-term view