Don’t Mistake Market Calm for Being Out of the Woods

Investors should search the past for lessons about where we are in the market cycle. 2005 was an instructive moment.

Is the fuss all over? February’s sharp fall in stocks has faded, with the S&P 500 only 3% below its January peak and up 4% for the year. The rise in Treasury yields has paused and corporate-bond spreads are still tight.

But now isn’t the time to get comfortable with the apparent calm.

The underlying economic picture in March is muddier...