What 100 years of stock-market crashes tells us about the S&P 500’s stunning tariff comeback

Strategists at BNP Paribas have conducted another deep-dive into the past 100 years of equity-market crashes—and they’re now offering an explanation that helps better frame this week’s impressive rebound in U.S. stocks and Friday’s aggressive Treasury selloff.

In a note released on Friday, strategists Greg Boutle, Benedicte Lowe, and Aurelie Dubost focused on the almost 20% drop in the S&P 500 between Feb. 19 and April 8—the period from the index’s third record close of the year, at 6,144.15, to its year-to-date low of 4,982.77. They dubbed this the “Tariff Crash” and compared it to the past declines seen during both recessionary and non-recessionary periods. For market data before 1928, they referenced spot prices on the Dow Jones Industrial Average.

The recent price action in equities is “consistent with prior non-recessionary crashes,” they wrote. Notably, crashes that occur without a significant economic downturn “can be large and volatile, but tend to be relatively brief.”

The BNP analysis may help to explain why stocks appear to be so resilient right now, even as debate rages over whether the U.S. is heading into a meaningful downturn.

Read: When are we in a recession? Here are 6 things to know about how that call is made.

On Friday, all three major U.S. stock indexes DJIA SPX COMP each finished with weekly gains near 3% or higher —just two days after investors learned the economy experienced a first-quarter contraction . Meanwhile, Treasury yields surged to two-week highs as investors dumped U.S. government debt, reversing trades that had been based on assumptions of an economic slowdown.

Investor sentiment also got a lift Friday from a stronger-than-expected jobs report for April, which showed 177,000 new jobs were added and the unemployment rate held steady at 4.2%, despite ongoing tariff-driven uncertainty. In addition, Beijing is said to be assessing ways to allow trade talks with the U.S. to start, according to The Wall Street Journal — which appears to be easing some trade concerns.

Trading in the middle of the week underscored the stock market’s resiliency. On Wednesday, the Dow and S&P 500 both staged big intraday turnarounds , advancing a series of positive closes, despite data that showed gross domestic product shrank at an annualized rate of 0.3% in the first quarter.

“Every equity crash has been unique,” the BNP strategists wrote. The February-April decline “was large, but not inconsistent with prior non-recession crashes. When considering recessions, the magnitude of drawdowns and length of bear markets both tend to be much greater.”

Still, they caution that stocks could retest their year-to-date lows on a combination of earnings downgrades and PE compression, a term used to describe shrinking multiples on price-to-earnings ratios.

One big caveat for investors: conditions can still shift quickly. A mild slowdown could still tip into a full-blown recession. What’s more, any assumptions could end up turning out to be off base.

Case in point: In 2022, BNP’s long-term analysis projected the S&P 500 could bottom near 3,000 and that the CBOE’s Volatility Index, or VIX VIX, might reach the low 40s in mid-2023. Neither of those scenarios happened.