(NewsNation) — Major stock indexes are at new record highs just months after appearing poised for a bear market in the wake of President Donald Trump’s trade war.
The S&P 500 closed at an all-time Friday, finishing above its prior peak in February. The fresh milestone marks a stunning turnaround for the benchmark index after April’s tariff-induced sell-off sent stocks plunging nearly 20% from their previous high.
Friday’s return to the peak marked one of the S&P 500’s fastest rebounds to a record close following a drop of at least 15%, according to The Wall Street Journal.
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Part of the enthusiasm stems from Trump’s decision to pause many of his harshest tariffs, signaling that the worst “Liberation Day” fears may not come to pass.
The Nasdaq composite, heavily weighted toward tech stocks, also hit a fresh record on Friday, its first since December.
Friday’s stock peaks came after President Trump announced that the U.S. has signed a trade deal with China, though he offered few details. Stocks have also climbed on hopes that the conflict between Israel and Iran will be shorter than initially feared.
“Progress in trade negotiations and little evidence that tariffs have driven up consumer prices have helped equity markets rally from their post-Liberation Day lows,” Saira Malik, chief investment officer at Nuveen, said in a LinkedIn post.
Hiring slows in May but no sign of collapse yet
The remarkable stock rebound will come as welcome news to Americans, but, as the old saying goes, the stock market is not the economy.
The job market has continued to cool, particularly for recent college graduates who have seen artificial intelligence chip away at the bottom rung of the career ladder.
New Commerce Department data released Friday showed consumers cut back on spending in May for the first time since January.
Still, it’s fair to say the overall economy is performing better than expected back in the spring, when Trump’s escalating trade war significantly raised the risk of a recession. It’s worth noting that many of those fears were based on tariff threats that ultimately didn’t materialize.
And economists aren’t declaring victory just yet.
Trump’s 90-day pause on reciprocal tariffs is set to expire in early July, potentially triggering another wave of uncertainty.
Major companies like Walmart and Nike have warned of price increases as they brace for the tariff storm.
Some experts expect the impact of tariffs to appear later this year, suggesting it’s not a matter of if, but when, they show up in the inflation data.
