MW The playbook from the last monster rally would take the S&P 500 to 10,675. What's different this time.
By Jamie Chisholm
Moving from oversold to overbought this quickly was last seen in 1982, says Evercore ISI
The rally is monster-like in its speed.
Stocks look like they will start the week on a cautious note. But any pause for reflection is understandable given the speed and strength of the latest rally.
The S&P 500 closed Friday at a record high, having jumped a fraction shy of 13% from the recent low on Mar. 30. The velocity of that rebound meant the Wall Street stock barometer moved from oversold to overbought - in terms of its 14-day relative strength index - in just 12 sessions.
That is very quick. In fact, it's the quickest oversold-to-overbought move apart from the 7-day spike in August 1982, according to Julian Emanuel, strategist at Evercore ISI.
Bear in mind, that means the recent pop is a faster rebound than the recovery from the tariff trough from April last year, the COVID low in 2020, the global financial crisis low in 2009, the dot-com bubble low in 2002 and the 1987 crash, says Emanuel in a note published over the weekend.
"There really aren't enough superlatives to describe these 28 [calendar] days since the pivotal March 30 low. The bull run has been nothing short of historic, conjuring up memories of 1982," says Emanuel.
Indeed, bulls will be hoping 1982 repeats itself, because despite becoming so swiftly overbought in 1982, from the August trough that year the market surged 69% over the next 14 months, according to Emanuel.
He calculates that if such a move were replicated now, it would take the S&P 500 SPX to 10,675 by June, 2027.
But investors eyeing that figure should take a beat. That's because 1982 and 2026 have very different macroeconomic backdrops, Emanuel warns.
The 1982 rally came after what he calls a secular peak in inflation and a secular peak in interest rates under Federal Reserve Chair Paul Volcker. Now, as Jerome Powell's tenure is almost up, the overall direction of travel for inflation is unclear and remains sticky above the Fed's 2% target, Emanuel notes.
And there's a huge difference in market valuations between the two periods, too. "1982 is also unique for stocks in that after a decade long bear market, [price-to-earnings] valuations had fallen to 8 times, unthinkable in today's environment, which after three consecutive double-digit return years into 2026, remains near generational highs at 25 times," says Emanuel.
But, for Emanuel, the critical difference between 1982 and 2026 lies in geopolitics and the oil-price dynamic. "For while the Iranian Revolution in 1979 fostered a half century of geopolitical instability, oil prices nonetheless peaked in 1980 and slid steadily for the next six years, driving inflation lower, setting the stage for share-price returns that are arguably the greatest era of wealth creation ever known," he says.
Today, there's great uncertainty about oil prices, and thus their impact on stocks. A spike in West Texas Intermediate crude to above $120 a barrel, or even just a prolonged period beyond the summer of more than $90 oil and $4 per gallon gas prices "will likely drive a retest of the 3/30 lows at 6,315 while a larger pullback to decade long support at 5,500 cannot be ruled out," says Emanuel.
However, if oil should fall sustainably below the post-spike trough of $76.73, Emanuel sees "the potential for 1982 style gains to SPX 9,000 and beyond."
Still, the firm's base case is for oil to moderate to the mid-$80's and for gas prices to be below $4 a gallon by July 4. Driven by tech stocks, the S&P 500 will climb to 7,750 in 2026, he says.
The markets
U.S. stock-index futures (ES00) (YM00) (NQ00) are mildly mixed as benchmark Treasury yields BX:TMUBMUSD10Y rise. The dollar index DXY is down, while gold futures (GC00) are trading around $4,720 an ounce.
Key asset performance Last 5d 1m YTD 1y S&P 500 7165.08 0.55% 12.50% 4.67% 29.68% Nasdaq Composite 24,836.60 1.50% 18.56% 6.86% 42.88% 10-year Treasury 4.319 6.50 -3.70 14.70 10.80 Gold 4720.9 -2.48% 3.97% 8.97% 40.72% Oil 96.29 12.11% -8.30% 67.72% 55.58% Data: MarketWatch. Treasury yields change expressed in basis points
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The buzz
The U.S. and Iran failed to hold mooted peace talks in Pakistan over the weekend. Tehran has offered to open the Strait of Hormuz but postpone nuclear talks.
Watch out for wild Wednesday, when Jerome Powell chairs what should be his final Federal Reserve monetary policy meeting and Microsoft $(MSFT)$, Amazon (AMZN), Meta $(META)$ and Alphabet $(GOOGL)$ report earnings.
Beijing has blocked Meta's $2 billion acquisition of China-founded Manus, the artificial intelligence platform.
Drugmaker Organon & Co. $(OGN)$ is to be bought by India's Sun Pharmaceuticals (IN:524715) for about $11.75 billion.
Companies reporting earnings on Monday include Verizon Communications $(VZ)$ and Domino's Pizza $(DPZ)$.
The Treasury will announce the result of a $69 billion 2-year note auction at 11:30 a.m. Eastern, and a $70 billion 5-year note auction at 1:00 p.m.
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The chart
Source: JPMorgan
There's a lot of buzz on social media about this chart from JPMorgan, which shows how analysts' earnings-per-share forecasts for the S&P 500 have evolved. Usually, analysts are optimistic at the start of the year, but then quickly begin to revise down their numbers in coming months. Not this time. Earnings forecasts are being pushed sharply higher, allowing investors to see past the Iran war and trade on the expected profit numbers.
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
Ticker Security name NVDA Nvidia TSLA Tesla AMD Advanced Micro Devices TSM Taiwan Semiconductor Manufacturing AMZN Amazon.com INTC Intel GME GameStop MSFT Microsoft MU Micron Technology AAPL Apple
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Beyond the newsroom
MarketWatch Picks: 'By then, the damage is already done.' 5 signs it's time to fire your financial adviser.
-Jamie Chisholm
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(END) Dow Jones Newswires
April 27, 2026 06:32 ET (10:32 GMT)
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