Market Update by Jurrien Timmer

Fidelity’s director of global macro, Jurrien Timmer, is adjusting his market outlook following a recent correction in equities.

In a post on social media platform X, Timmer shared a chart illustrating the average returns of the S&P 500 during presidential terms with his 194,000 followers. The chart indicates that the S&P 500 appears to be following historical averages from previous presidential cycles, suggesting that the current drawdown may end around July of this year.

> “While I wouldn’t put too much weight on this indicator, the iteration of the Presidential cycle in which the mid-term year (2022) is down, continues to play out nicely. We are now in ‘year 5’ (if that makes any sense), and that year has been down on average for the first six months. It suggests a modest but multi-month corrective period.”

Timmer further examines 26 S&P 500 corrections dating back to 1906, noting that the current dip feels similar to 2018, which could indicate a potential bottom around the 4,900 level.

> “Last week’s reprieve from the tape bombs (which have become such a feature in 2025) allowed the markets to catch their breath. For now, we remain in 10% correction territory while we wonder whether the next 10% will be up or down.”

The following chart reflects all corrections and bear markets since 1900, and Timmer suggests that this correction resembles late 2018, characterized by a 20% decline driven primarily by multiple compression.