The broader market indexes soared on Monday, May 12, in response to news that the U.S. and China would pause their reciprocal tariffs on most goods for 90 days — a move that built on the momentum from the trade deal framework that the U.S. and U.K. revealed at the end of last week.

As of Monday’s close, the S&P 500 (^GSPC 0.10%) was down just 0.6% year to date  — an astonishing rebound considering the index was down by more than 15% on the year at the nadir of its sell-off in early April.

While it’s great to see portfolio balances recover, those gains will matter little if they are fleeting, and investors are likely wondering if this bounce is the real deal or a head fake.

Either way, it’s important to focus on quality companies during volatile periods. But here’s why I think the worst of the 2025 stock market sell-off may be over, and what I’d recommend you do if the market keeps rallying.

Image source: Getty Images.

An end in sight

There’s no perfect science for knowing when a sell-off is about to start nor for gauging when one is over. But there are some simple indicators you can use to gauge market sentiment.

The simplest is the relationship between stock market sectors. When investors are optimistic about the outlook for the economy and corporate profits, growth-focused and cyclical sectors like tech, consumer discretionary, communications, financials, and industrials tend to do well. But when investors are fearful, then defensive and “safe” sectors such as utilities, consumer staples, and healthcare usually outperform the benchmarks.

Similarly, investors often turn to hard assets like gold during times of uncertainty. At one point in late April, gold prices were up by over 30% year to date while the S&P 500 was down more than 12%.

Another good indicator to watch is the CBOE Volatility Index, commonly known as the VIX. It measures the implied volatility of short-term options on the S&P 500. If investors are willing to pay more for a call option because they think the market will go up a lot in the short term, or a put option to protect against downside risk, then that will lead to higher volatility.

The VIX was at its lowest point of the year when the S&P 500 was near its all-time high in late February. Then, shortly after President Trump unveiled his global tariffs on April 2 (“Liberation Day”), the VIX spiked in lockstep with a massive sell-off in the S&P 500.

Data by YCharts.

In the last few weeks, the VIX has been falling and the S&P 500 has been climbing, a combination that could signal that the worst of the sell-off is over.

Great companies can sell off for bad reasons

The last month and a half or so have been a great lesson on the pitfalls of getting caught up in stock market volatility and letting emotions drive your investment decisions. It also shows the degree to which the market despises uncertainty.

The steep tariffs that Trump imposed led to a host of countries imposing their own higher tariffs on U.S. exports. The escalating tensions put the U.S. on the brink of an all-out trade war. Corporate leaders didn’t shy away from outlining the effects these tariffs would have on their businesses.

For example, Nvidia said it would be taking a $5.5 billion charge in its fiscal 2026 first quarter. Shares of Apple and Nike got crushed due to their exposure to China, both as a manufacturing hub and as a major market for sales.

However, strong results from top tech companies in the recent earnings season were a reminder that much of the broad market sell-off was based on fears of an economic downturn that had yet to materialize.

Microsoft reported phenomenal results and reaffirmed its upbeat revenue and operating margin guidance.

Meta Platforms ramped up its data center and artificial intelligence investments, and management forecast higher capital expenditures this year.

Alphabet reported steadily rising revenue and high margins. It also raised its dividend.

Outside of big tech, several companies saw their stock prices get crushed for the wrong reasons. For example, American Express reported excellent results and reaffirmed its full-year guidance. Its long-term investment thesis looks stronger than ever with the company expanding its network while displaying impeccable risk management. Yet the stock got clobbered, and its price-to-earnings ratio was compressed to bargain-bin levels.

Microsoft, Meta, Alphabet, and American Express are just some of the many examples of companies that were doing just fine even when trade war tensions were hot, yet their stock prices fell anyway.

Quality wins in the long run

Market sell-offs can be swift and brutal. When your screen flashes red with no end in sight, it’s easy to get caught up in fear.

However, companies with strong balance sheets don’t need to overhaul their capital spending plans just because new policies in Washington appear liable to throw a wrench in a few quarters of results. Investors can take a similar approach by not overhauling their investment portfolios based on factors that don’t pertain to the underlying investment theses of their holdings.

Resisting the urge to take action can be difficult, but I’ve found that one of the best ways to handle volatility is to invest in a way that limits pressure.

Pressure can come in different forms. But some of the simplest ways to mitigate pressure are to invest with a long-term mindset with money that you won’t need anytime soon. Also, stick to holding shares of companies that you understand and that have strong fundamentals. Lastly, accept that rough conditions can get worse before they get better.

The same approach applies when the market is going up. You can eliminate pressure on yourself by recognizing that you don’t have to time the very bottom to buy, nor wait to buy stocks until you can get them at incredible prices. Even if you’re feeling like you missed out on the bargain-bin prices from recent weeks, that’s OK. The real wins come from investing in top companies and holding them over the long term, not from trying to capitalize perfectly on short-term periods of market volatility.

Market sentiment shifted as reports emerged that the U.S. might reduce tariffs on Chinese imports, potentially easing global recession fears. This positive sentiment boosted Bitcoin’s appeal as a hedge against economic uncertainty, further supported by a stronger risk appetite among investors.

Key Market Drivers:

• U.S.-China trade optimism
• Strong support at $103,818 (50-day EMA)
• Bullish technical breakout above $105,000

Bitcoin (BTC/USD) Daily Technical Outlook – May 12, 2025

Bitcoin price prediction remains bullish amid BTC recent breakout above $105,000 signals a potential shift in market momentum. The 50-day Exponential Moving Average (EMA) at $103,818 provided strong support during the consolidation phase, reinforcing bullish sentiment as the price held above this critical level.

The breakout now sets the stage for a potential rally toward the next major resistance at $106,750, with a further upside target at $107,300, aligning closely with the psychological $107,000 mark.

The Moving Average Convergence Divergence (MACD) indicator is also turning bullish, with the histogram expanding and the MACD line crossing above the signal line.

This suggests growing buying pressure, reinforcing the breakout. However, traders should watch for a potential pullback if Bitcoin fails to hold above the $105,000 support.

Key Price Levels:

• Immediate Resistance: $106,750
• Next Resistance: $107,300
• Immediate Support: $105,000
• Next Support: $103,818
• Lower Support: $103,080

Market Risks and Potential Pullbacks; Bitcoin Gains

While the breakout above $105,000 is a positive sign, the market remains vulnerable to downside risks. If Bitcoin fails to sustain this momentum, a pullback toward the immediate support at $103,818 is possible.

A breach of this level could expose Bitcoin to a deeper correction toward $103,080, which coincides with a previous support zone and the lower boundary of the recent trading range.

Traders should also keep an eye on the Relative Strength Index (RSI), which is approaching overbought levels, potentially signaling a short-term correction.

BTC Bull Token Crosses $5.58M as Flexible 78% Staking Yield Draws Investors

BTC Bull Token ($BTCBULL) continues to gain traction, crossing $5.58 million in funds raised as it nears its $6.27 million presale cap.

Priced at $0.002505, the token has positioned itself as more than just a meme coin—offering real utility through flexible, high-yield staking.

Utility-Driven Tokenomics Fuel Demand

Unlike typical meme tokens, BTCBULL blends crypto culture appeal with tangible staking rewards. Investors can currently earn an estimated 78% APY while keeping their tokens fully liquid—unstaking is allowed at any time without penalties or lockup periods.

This model has resonated with investors who seek yield without sacrificing access, especially in a volatile crypto environment.

Current Presale Stats:

• USDT Raised: $5,581,603.93 of $6,272,266
• Current Price: $0.002505 per BTCBULL
• Staking Pool Total: 1,342,549,903 BTCBULL
• Estimated Yield: 78% annually

With less than $690K left before the next milestone, the presale window is narrowing fast. For investors chasing high yields with exit flexibility, BTCBULL is becoming an increasingly compelling contender in the 2025 crypto cycle.

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