After individual investors report taxes and bring back their capital, will the US stock market's "April market" start soon?

Bulls believe that the volatile trend in the US stock market is nearing its end, and seasonal patterns are providing support. Data compiled by Bloomberg shows that April has historically been a strong month for US stocks - since 1990, the S&P 500 Index has averaged a 1.5% increase in April, second only to November (2.2%). Some market views suggest that this seasonal strength is related to the behavior of retail investors: after the tax deadline in the middle of the month, they often reinvest their funds in the stock market. Dave Lutz, stock sales trader and macro strategist at Jonestrading Institutional Services LLC, said, "Many dynamics are related to the liquidity needs of retail investors before the tax deadline. People may be waiting and keeping their cash until taxes are done. Historically, after taxes are done, people receive refunds and reinvest." According to data from Barclays Bank since 2006, the S&P 500 Index has averaged a 0.83% increase from April 15 (US tax deadline) to the end of the month. According to the US Internal Revenue Service data, consumers received 10% more tax refund checks this year compared to the same period in 2025. This may provide a boost to the market. Previously, concerns in geopolitical and policy areas led to a pullback in tech giant stocks, and the S&P 500 Index dropped over 5% from its peak. On Monday, the S&P 500 Index rose 0.4%, and the Nasdaq 100 Index rose 0.6%. Historical data shows that April is the second best month for the S&P 500 Index. According to data from the Stock Trader's Almanac since 1994, the Nasdaq Composite Index and the small-cap Russell 2000 Index typically show strong upward momentum in the second half of April. However, the research director at the organization, Christopher Mistal, cautioned that attributing this phenomenon entirely to the impact of tax season may be premature, as investors may also be adjusting their positions for the upcoming earnings season. Mistal said, "Nevertheless, the combined impact of various events, as well as the impact of Easter this year, has indeed shifted most of April's upward momentum to the second half of the month." Investors buying stocks again in April are not limited to retail investors. Goldman Sachs' trading division indicated that systematic investors (including commodity trading advisors and volatility-targeting strategy investors) may inject about $20 billion into the US stock market as selling ends. The historical strength this month may bring some solace to investors seeking a bottom after the sell-off. Earlier, the S&P 500 Index dropped 9% from its high in January due to the Iran conflict triggering the largest oil price surge in history. Although a rebound is visible, the market remains in the midst of an unpredictable war vortex. Most of the rebound is expected to show up in the second half of this month. According to data from Vanda Research since 2013, the first half of April is usually one of the weakest periods for retail investor buying activity, while buying activity in the last two weeks tends to slightly increase and continue until the end of the month and end of the quarter. Global macro strategist at Vanda Research, Viraj Patel, said, "Since the Iran conflict erupted, most investors have significantly reduced their risk exposure, making it seem unlikely that further selling will occur in the coming weeks." He added, "Once the impact of retail investor tax day fades, the setup for a potential rebound in the stock market starting in the second half of April is starting to look attractive. Furthermore, if the Iran conflict situation eases or ends, it will also help attract investors back to the market."