- The S&P 500 is simply 3% beneath its file excessive set in mid-February, when President Donald Trump launched a commerce battle that started with Canada and Mexico. That places the index round bull market territory and marks a surprising rebound from only a month in the past as markets crashed after Trump unveiled his “Liberation Day” tariffs.
U.S. shares are already inside shouting distance of file highs—only a month after crashing on President Donald Trump’s steeper-than-expected “Liberation Day” tariffs.
The S&P 500 is 3% beneath its peak set in mid-February, when Trump launched a worldwide commerce battle that started with tariffs on Canada and Mexico.
That marks a surprising rebound from final month because the index flirted with a bear market amid a virtually 20% selloff. Now, it is round bull market territory once more. From its closing low in early April, the S&P 500 is up nearly 20%. And from its intraday low, it is up greater than 20%.
In the meantime, the Dow Jones Industrial Common is 5% shy of its all-time excessive, the Nasdaq is off by 4.9%, and the small-cap Russell 2000 is 14% beneath its file.
After initially surprising markets together with his excessive tariffs, together with a 145% fee on China, the Trump administration has quickly paused a few of its most aggressive duties whereas participating in talks with high buying and selling companions.
On Friday, stories that the U.S. and European Union had begun critical negotiations gave markets a elevate after rallying earlier this month on Trump’s de-escalation with China and a commerce deal he made with Nice Britain.
However Moody’s downgrade of the U.S. credit standing Friday night was reminder of the risk that hovering debt ranges pose over the long run, particularly if bond market merchants jolt Treasury yields increased and sink the inventory market.
For now, it might not decelerate the market surge by a lot. A number of Wall Road analysts mentioned Moody’s merely identified what buyers already knew in regards to the quickly deteriorating fiscal scenario and adopted related strikes from Fitch in 2023 and Commonplace & Poor’s in 2011.
Simply earlier than the debt downgrade, some market veterans have been optimistic that shares might proceed notching extra features.
“I am turning into extra bullish. I name it the ‘Trump pivot,'” the Wharton Faculty’s Jeremy Siegel instructed CNBC on Friday afternoon, referring to the tariff pause.
Whereas he estimated shares can be 10% increased with out Trump’s tariffs, he added that the market nonetheless has “loads of optimistic issues going for it,” corresponding to inflation readings which are higher than feared and Trump’s dealmaking within the Center East.
“I feel this market might shock everybody by hitting new highs,” Siegel predicted.
Fundstrat World Advisors cofounder Tom Lee was equally bullish, citing higher tariff visibility in addition to the prospect of tax cuts, deregulation, and extra easing from the Federal Reserve in 2026.
On the identical time, corporations “survived a black swan occasion” and managed to beat earnings expectations of their latest stories, he added.
“And when you consider 2026 earnings having upside, I feel there’s nonetheless upside for shares,” he instructed CNBC on Friday afternoon.
Michael Brown, senior analysis strategist at Pepperstone, mentioned Wednesday that U.S.-China talks final weekend that produced a serious easing of commerce tensions strengthened the concept that markets have handed the height of tariff uncertainty.
“Add all of it collectively, sprinkle on high obvious progress on the Home GOP tax cuts invoice, growing religion that the debt ceiling might be resolved in well timed style, and a mindset the place (no less than for now) buyers will look by way of dangerous knowledge as being skewed by tariffs which are now not in place, and you’ve got a really potent cocktail certainly to ship shares additional increased,” he wrote in a be aware. “The 6,000 deal with would be the first take a look at for [the S&P 500], and recent file highs definitely can’t be dominated out shortly after.”
To make certain, there are nonetheless skeptics on Wall Road, warning that the inventory rally is fragile.
Whereas Trump has paused his greatest tariffs, they’re unlikely to go away fully, and administration officers have signaled that 10% is a baseline—should increased than historic ranges. And later within the yr, financial knowledge and company earnings will present extra indicators that tariffs are having an impression.
Earnings momentum will fade, and even the Magnificent 7 tech giants will see income progress sluggish, in line with Lisa Shalett, chief funding officer of Morgan Stanley’s wealth administration division.
“I feel we’re going to stall out right here,” she instructed Bloomberg on Friday. “It’s arduous to justify the numbers.”
This story was initially featured on Fortune.com
