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The S&P 500 is just 3% below its record high set in mid-February, when President Donald Trump launched a trade war that began with Canada and Mexico. That puts the index around bull market territory and marks a stunning rebound from just a month ago as markets crashed after Trump unveiled his "Liberation Day" tariffs.
U.S. stocks are already within shouting distance of record highs—just a month after crashing on President Donald Trump's steeper-than-expected "Liberation Day" tariffs.
The S&P 500 is 3% below its peak set in mid-February, when Trump launched a global trade war that began with tariffs on Canada and Mexico.
That marks a stunning rebound from last month as the index flirted with a bear market amid a nearly 20% selloff. Now, it's around bull market territory again. From its closing low in early April, the S&P 500 is up almost 20%. And from its intraday low, it's up more than 20%.
Meanwhile, the Dow Jones Industrial Average is 5% shy of its all-time high, the Nasdaq is off by 4.9%, and the small-cap Russell 2000 is 14% below its record.
After initially shocking markets with his high tariffs, including a 145% rate on China, the Trump administration has temporarily paused some of its most aggressive duties while engaging in talks with top trading partners.
On Friday, reports that the U.S. and European Union had begun serious negotiations gave markets a lift after rallying earlier this month on Trump's de-escalation with China and a trade deal he made with Great Britain.
But Moody's downgrade of the U.S. credit rating Friday evening was reminder of the threat that soaring debt levels pose over the longer term, especially if bond market traders jolt Treasury yields higher and sink the stock market.
For now, it may not slow down the market surge by much. Several Wall Street analysts said Moody's merely pointed out what investors already knew about the rapidly deteriorating fiscal situation and followed similar moves from Fitch in 2023 and Standard & Poor’s in 2011.
Just before the debt downgrade, some market veterans were optimistic that stocks could continue notching more gains.
"I'm becoming more bullish. I call it the 'Trump pivot,'" the Wharton School's Jeremy Siegel told CNBC on Friday afternoon, referring to the tariff pause.
While he estimated stocks would be 10% higher without Trump's tariffs, he added that the market still has "a lot of positive things going for it," such as inflation readings that are better than feared and Trump's dealmaking in the Middle East.