Stocks continued to fall Thursday afternoon after President Trump declared that the current market turmoil is not as severe as he expected.
“Frankly, I thought oil prices would go up more and I thought the stock market would go down more,” Trump said at a Cabinet meeting Thursday. “(The market reaction) hasn’t been as bad as I thought.”
At the meeting, Trump touted that the Dow Jones surpassed 50,000 and the S&P 500 hit 7,000 earlier this year.
But those milestones were extremely brief: The S&P never closed above the intraday high of 7,000, and the Dow spent just four days above its peak.
Currently, the S&P 500 is trading about 6.5% below its intraday high of 7,002 reached in late January. It entered a pullback (a 5% drop from recent highs) two weeks ago and came closest to entering a correction (a 10% drop) last Friday. The Dow Jones is trading 7.9% below its all-time closing high of 50,188 points.
Still, when Trump said Thursday that a market pullback would be a “short-term hit” that would lead to higher stock prices in the future, history suggests he is right.
Analysts at Argus noted in a note on Thursday (premium users can download it here) that pullbacks occur frequently and that the average time for the market to recover has been a month. A correction, analysts said, could take four months; however, it depends on the market fundamentals at that time.
Although the Iran war clouds the market’s outlook in the short term, Argus expects oil prices and interest rates to fall once the conflict ends.
“Overall, we remain optimistic that stocks can post gains in 2026,” the analysts wrote, “although our base outlook calls for single-digit returns, not the 15% to 25% returns that investors have enjoyed over the past three years.”