Global Markets Rebound After Dramatic Turnaround

Picture Credit: capitaleconomics.com

Global markets ended the week on a high note as U.S. stock indices surged to new record levels, marking a stunning recovery from near-bear market conditions just months earlier. The S&P 500 closed at an all-time high of 6,173.07 on Friday, gaining 0.5%—its first record since mid-February. The Nasdaq Composite also reached a record, buoyed by the AI-driven tech rally, while the Dow rose 432 points, posting its biggest weekly gain in six weeks.

Just 80 days ago, on April 8, the S&P 500 had lost $9.8 trillion in value. However, cooling inflation, optimism around Federal Reserve rate cuts, and a boom in AI—particularly from Nvidia’s chips—have driven investor sentiment sharply upward.

The recovery wasn’t without turbulence. President Trump’s announcement of new tariffs on Canada due to its digital services tax briefly dampened market momentum. Still, stocks rebounded within the hour and finished strong.

Trade tensions, once the primary threat to markets, appear to be easing. After a wave of reciprocal tariffs in early April, the U.S. paused increases and reached tentative agreements with China and the U.K. A breakthrough with China over rare earths added to investor optimism. Treasury Secretary Scott Bessent suggested that trade deals with key partners could be finalized by Labor Day.

Picture Credit: psuwatch.com

However, risks remain. The expiration of the 90-day tariff pause, a potential U.S. debt ceiling deadlock, high stock valuations, and geopolitical tensions in the Middle East could all test market resilience. The S&P 500’s price-to-earnings ratio has climbed above 23, signaling caution.

As Art Hogan of B. Riley Wealth notes, “Investors get the joke now”—markets have grown adept at navigating uncertainty. For now, though, the bulls are back, and Wall Street is celebrating.