New normal for US stocks? Only a few weeks into 2026, there have already been five “sharp drops followed by V-shaped reversals.”

Just over a month into 2026, the US stock market has already repeatedly played out the same scenario: a sharp midday drop, loss of control in sentiment, but rapid recovery before closing, even returning to high levels.

According to Wind-chasing Trading Desk, Deutsche Bank pointed out in its latest report that since January alone, the S&P 500 index has experienced at least five typical cases of "quick plunge — rapid rebound."

These fluctuations are often accompanied by narratives of geopolitical tensions, tariff threats, tech stock panic, or AI competition, yet almost none have caused substantive or sustained damage to the broader market.

In Deutsche Bank's view, this is not by chance, but may be the "new normal" currently taking shape in US stocks.

Five “Fake Falls”: Frequent Risk Events, but the Market Refuses to Fall Deeply

Deutsche Bank macro strategist Henry Allen sorted out several representative rapid retreats since the beginning of 2026:

Mid-January Geopolitical Risk Escalates: After hitting a new high on January 12, the S&P 500 fell more than 1% intraday due to worries over potential US involvement in Iran and political statements regarding Greenland. However, panic quickly dissipated, the day's loss narrowed significantly, and the index rebounded again over the next two days.Late January Tariff Threat Sparks Selloff: The US proposed possible tariffs against some European countries, leading the S&P 500 to plunge more than 2% in a single day. Yet, as the negotiation framework emerged, the index rebounded on the next two trading days, almost fully recovering the loss.Late January Tech Sector Capex Concerns: Microsoft’s earnings revealed higher than expected capital expenditure, sparking worries over the AI investment return cycle, with the software sector sharply hit, dragging the market down more than 1.5% intraday. By the close, however, the index was only slightly lower, and panic did not spread.Early February Precious Metals Crash Hits Risk Assets: A major correction in precious metals markets briefly dragged S&P futures down nearly 1.5%, but US stocks rebounded quickly after the open, and the index not only turned positive, but ended only a step away from record highs.Latest Example: Software & AI Competition Stirs Waters: New AI tools from Anthropic pressured software stocks, with the S&P 500 falling as much as 1.64% intraday. But as before, there was a clear rebound in the final minutes and losses ultimately came to less than 1%.

Deutsche Bank emphasized that every time the market fell, there was rapid speculation that "this could be the start of a major correction," but time and again the result proved: lots of emotional noise, little trend disruption.

Why Can't Stocks Fall? The Key Lies in Macro, Not Headlines

In Deutsche Bank's view, judging whether the market will enter a truly sustained downturn depends not on the short-term shocks but on whether macro expectations undergo "structural downward revision."

Historical experience shows that whether it was the 2022 bear market or earlier internet bubbles, they reflected systemic deterioration in growth, policy, or financial conditions. The current environment is just the opposite:

The US economy continues to grow rapidly, with Q3 annualized growth reaching 4.4%, and the Atlanta Fed’s GDPNow forecast for Q4 still above 4%;The January ISM manufacturing index rose to its highest level since 2022;Eurozone Q4 economic growth beat expectations, with PMI in expansion territory for a full year;Germany’s fiscal stimulus will provide extra support for European economies in 2026.

In this context, individual risk events are unlikely to trigger systemic risk repricing. Deutsche Bank bluntly stated that as long as macro fundamentals do not significantly deteriorate, the market is more inclined to treat sharp dips as "buyable volatility" rather than signals of trend reversal.

A Market Behavior Taking Shape: Data Matters More Than Narratives

Deutsche Bank’s report puts forward an intriguing conclusion: the market’s weighting of "real data" is now noticeably higher than its weighting of "news narratives."

Nearly all major asset classes saw gains in January, which in itself shows that risk appetite has not been damaged. The repeated pattern of rapid recovery after sharp drops is only reinforcing investors' path dependence—buying the dip continues to be validated as an effective strategy.

This explains why market volatility frequency is rising, but the amplitude of trend volatility is firmly suppressed.

Deutsche Bank does not deny the existence of risks but reminds investors to distinguish "noise" from "signal." Only when growth expectations, policy paths, or financial conditions experience a substantial reversal will US stocks face a true trend decline. Until then, the "sharp drop—rebound" pattern repeatedly seen in 2026 may well be the truest portrait of how US stocks operate at this stage. For now at least, it looks much more like a new normal, not the calm before the storm.

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The above content is from Wind-chasing Trading Desk.

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