Wall Street’s Rebound: A Historic Flow Out, Then a Surge Back In

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Our View

The ES rallied 1,053.50 points off its 4,832.00 low. At the height of Trump's tariffs—or "Tariff Liberation Day"—he became one of the most disliked presidents in many years. His art-of-the-deal making was clearly blowing up the stock market and caused the largest U.S. stock market outflows into the European indices in the history of the markets.

Approximately $81.3 billion moved out of the U.S. stock market in early 2025, with $63 billion from foreign investors (primarily European) in March–April and $18.3 billion from U.S. equity funds in early May. Of this, at least $24.779 billion is confirmed to have moved into European stock markets, including $15.779 billion in European ETF inflows, $2 billion in U.S.-based European ETF inflows, and $7 billion in international stock inflows led by Europe.

The outflows are probably higher, but obviously global investors got nervous. The dollar was tumbling, and TRUMP wasn’t just blowing up the U.S.—he was taking the world with it. Fast forward, the ES just traded 5,927.000 and is positive since Trump’s Tariff Liberation Day.

• Weekly performance shows a gain of 4.99% from May 6 to May 13, 2025.

• The monthly gain is 9.75% from April 11 to May 13, 2025.

• The quarterly gain is 3.80%, from April 2 to May 13, 2025.

• The year-to-date performance as of May 13, 2025 is up 0.3% from December 31, 2024.

The big risk-off trade has been followed by a rush to get back in. While some people think that Trump caved in on the China tariffs, it all looks like he did exactly what he set out to do and said he knew what he was doing the whole time. When I spoke to the PitBull, he said he's never seen a market move like this and went on to say it looks like we are going to 6000.00.

I remember writing about how the buyers usually show up when the ES is down 20% (it fell 21.64%) and listed the number of 20% drops or more. There have been only six occasions since 1980. A 25% or more drop has only occurred ten times, including major events like the Great Depression (1929–1932) and the 2008 financial crisis. 30% declines have only happened eight times, with the most notable being the 2008 credit crisis and the 2020 COVID-19 crash.

Conclusion: While they may be far and few between, 20% to 30% declines are historically a good time to enter the stock market.

Like Trump or not, the ES and NQ have had a hell of a rally. It's totally crazy, the buyers have this so locked down that the ES didn’t even have 20-point pullbacks until after 4:00. The PPT has spoken, and there just seems like there’s no stopping the push higher. The ES is only 308 points off its all-time high at 6,235.00, and the NQ is 1,326 points off its all-time high at 22,672.00.

While the index markets have rallied, the unwind between bonds and notes continues. Yesterday, bonds traded down to 112.59, just a few points off the low of 110.59 set on April 8th. There were two distinct rotations yesterday: buying the NQ and selling the RTY, and a pattern we’ve been seeing regularly, buying the 10-Year Note and selling the 30-Year Bond, which has been very prevalent over the last several trading sessions.

The 30-Year U.S. Treasury bond yield has increased by approximately 15.5 basis points, from ~4.645% on April 4, 2025, to ~4.80% on May 13, 2025. For comparison, the 10-Year Treasury Note yield rose by 60 basis points, from 3.90% to 4.50% over the same period.