Market Review: S&P 500 Gains Amid Q1 Turbulence, Focus on Cheap Stocks

The S&P 500 surged on the last day of March, ending a challenging quarter with renewed optimism. Despite this uptick, the benchmark index still experienced a 6% decline in Q1, while the Nasdaq fell by more than 10%. Factors such as tariff uncertainties and profit-taking following a strong rebound from 2022 lows contributed to this downturn.

As Wall Street steps into the second quarter, it grapples with uncertainty, awaiting President Trump’s tariff update scheduled for April 2.

Market Outlook and Earnings Growth

The future remains unpredictable. However, the Nasdaq has retreated from some of its highest Relative Strength Index (RSI) levels of the past two decades, landing at a more neutral position. Moreover, expectations for earnings growth remain positive, and the Federal Reserve is projected to implement two more interest rate cuts in 2025.

This environment may instill confidence in long-term investors looking to capitalize on the current market volatility.

In this context, we will examine affordable stocks priced at $10 per share or lower that investors may want to consider for April.

These stocks not only have low price points, but also receive favorable evaluations from Wall Street analysts, supported by improving earnings outlooks reflected in their strong Zacks Ranks.

Understanding Penny Stocks and Stocks Under $10

Traditionally, “penny stocks” referred to shares priced at one dollar or less. Today, this classification has expanded to include stocks trading under $5, as defined by the SEC. Many investors shy away from these stocks due to their speculative nature.

Penny stocks also typically experience lower trading volumes and wider bid/ask spreads, resulting in significant volatility. Nevertheless, the potential for strong performance keeps these stocks appealing to certain investors.

Next in line are stocks priced between $5 and $10, which are generally perceived as less risky than penny stocks. Investors may be more familiar with these companies, yet they still carry speculative elements compared to higher-priced stocks.

Identifying winning stocks under $10 is possible with careful selection. Today, we have narrowed down a large pool of these stocks to highlight those with potential for portfolio enhancement.

Screening Criteria for Stock Selection

• • Price less than or equal to $10
• • Volume greater than or equal to 1,000,000
• • Zacks Rank less than or equal to 2
• (No Holds, Sells, or Strong Sells.)
• • Average Broker Rating less than or equal to 3.5
• (Average Broker Rating of a Hold or better.)
• • Number of Analysts in Rating greater than or equal to 2
• (At least two analysts covering the stock.)
• • % Change in F1 Earnings Estimate Revisions — 12 Weeks greater than or equal to 0
• (Preferably upward revisions, with no downward adjustments.)

Out of nearly 70 highly ranked stocks trading under $10 that met these criteria, one stands out today:

Spotlight on a Promising Stock: Rolls-Royce

Rolls-Royce RYCEY is a renowned manufacturer of engines, now advancing into innovative power and propulsion solutions for a variety of applications, including aircraft and maritime. The company is leveraging its expertise in nuclear propulsion to design small modular nuclear reactors (SMRs) and micro-reactors.