Happy Monday! The big question we’re tackling today: Has the market bottomed? Plus, we’re unpacking Scott Bessent’s Sunday comments, cheap big tech stocks, and more. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here. 

Sentiment as a vibe check

When the bears get loud, it could be time to turn bullish. 

The S&P 500 just saw its fifth-fastest correction in seven decades, yet it notched its best one-day performance of 2025 on Friday, raising speculation on whether the market has bottomed. 

No one can know for sure whether there’s more pain to come, but unpacking the “vibes” on the market suggests a bullish shift.  

Historically, sentiment can be taken as a contrarian indicator. We can trace this back to Warren Buffett’s advice “to be fearful when others are greedy and to be greedy only when others are fearful.”

Indeed, investor sentiment has soured over recent weeks: 

• AAII Sentiment Survey: The latest American Association of Individual Investors (AAII) survey showed more respondents are now bearish than bullish

• Investors Intelligence Sentiment Index: This index, which tracks sentiment across financial publications and newsletters, has also turned more negative on the outlook for stocks

“For now, sentiment indicators are very bearish, which is bullish from a contrarian perspective,” strategists at Yardeni Research wrote in a note Friday. 

Several other market signals are worth noting here:

• CBOE Put/Call Ratio: It’s climbed to a bearish 0.94, above its average of 0.66, suggesting traders are positioning for the market to fall

• Gold prices: The safe-haven asset just breached $3,000 an ounce for the first time ever

• Consumer Sentiment: The University of Michigan’s latest survey dropped from 64.7 to 57.9, the weakest reading in over two years

Steve Sosnick, chief strategist of Interactive Brokers, pointed out that the previous low for the Michigan data registered on November 30, 2022.

That, he observed, turned out to be a “rather opportune time to buy stocks” as the market bottomed. 

Meanwhile, the AAII survey at the time hovered at similar levels as it does today, with about 60% of respondents bearish. Over the next 12 months, the market rallied roughly 20%.

This pattern echoes what followed the worst days of the Great Recession. In March 2009, over 60% of AAII respondents were bearish, yet the S&P 500 went on to close that year more than 22% higher. 

To be clear, much of investors’ current apprehension is justified.

Markets crave certainty and clarity — two words that don’t exactly describe the Trump administration’s early months of governance. 

The president has flipped tariffs on and off like a light switch, federal spending cuts have disrupted government agencies, the labor market appears to be weakening, and some Wall Street firms have slashed their growth estimates.

The Federal Reserve, too, still has to decide whether to cut interest rates sooner or later.

Yet as history has shown, pessimism and investment opportunities often peak at the same time, particularly for those who can look beyond immediate uncertainty. 

Risks are still present, but when people act fearful, as they are now, it pays to pay attention.

Market snapshot:

Elsewhere:

🏦 Scott Bessent says the White House is preventing a financial crisis. The Treasury Secretary said Sunday that his team is focused on averting a downturn: “What I could guarantee is we would have had a financial crisis. I’ve studied it. I’ve taught it. And if we kept up at these spending levels…everything was unsustainable.” (CNBC)

📉 Big Tech stocks are much cheaper now. The valuations of Magnificent Seven names have come down from lofty heights over recent weeks, but they remain above the lows seen in 2018 and 2022. Some analysts are hesitant to snap up shares now in case the broad market continues to fall. (Bloomberg)

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Rapid-fire:

• A drop in global risk appetite is pushing emerging-market investors into higher quality dollar bonds (Bloomberg)

• China is outspending the US in nuclear energy and building projects at record speed (CNBC)

• Marco Rubio said once the US has imposed tariffs on its major partners it could engage in new talks for trade deals (Reuters)

• Housing affordability concerns extend beyond renters and first-time buyers (ResiClub)

• Baidu launched two new versions of its AI model Ernie (TechCrunch)

• The national debt is a serious problem and the US has become dependent on government spending (Pomp Letter)

Last thing:

About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply directly to this email, ping me on X @philrosenn, or write me [email protected].