The US stock market reached an all-time high on Friday. The S&P 500 and Nasdaq closed at record levels. This marked the first high for the S&P 500 since mid-February.
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It was a remarkable rebound on Wall Street since the index flirted with bear market territory in early April. The S&P 500 gained 0.5%, closing at a record 6,173.07. This was its first new high since February 19.
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The Nasdaq Composite also attained a record high on Friday. It gained 0.5%, its first all-time high since December 16.
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The tech-centric Nasdaq has surged recently, driven by a boom in artificial intelligence (AI) and the performance of major tech stocks.
The Dow Jones Industrial Average rose 432 points, or 1%. However, it remains about 1,200 points, or 2.7%, below its all-time high. It was dragged down by significant declines in UnitedHealth, Apple, Merck, and Nike.
Each of the major indexes posted their largest weekly gains in six weeks. The S&P 500’s journey to this high has been tumultuous.
Record highs for major indexes
The index recovered all earlier losses over the past two and a half months. Few experts on Wall Street anticipated such a swift comeback when stocks were on the verge of plunging into a bear market earlier this year. The recent record highs underscore the volatility that traders and investors have navigated.
Trump’s tariff policies and negotiations have been a significant factor in market fluctuations. The administration’s recent frameworks for trade deals with the United Kingdom and China have provided some relief to investors. Despite these gains, stocks face numerous challenges in the coming weeks and months.
Consumer spending in the first quarter of 2025 was at its weakest in over four years. The prospect of increased tariffs post the 90-day reciprocal tariff pause and geopolitical concerns in the Middle East remain potential threats. Stock valuations have surged well above earnings expectations, making them appear expensive compared to their profit outlooks.
The S&P 500’s price-to-earnings ratio has surpassed historical averages, raising concerns about the sustainability of the current rally. Investors face a mixed bag of opportunities and challenges. Hopes for an interest rate cut from the Federal Reserve, driven by robust economic data and low inflation, continue to buoy market sentiment.
Policy decisions, both domestic and international, will play critical roles in shaping future market conditions. While markets celebrated the historic highs at the close of Friday’s trading session, the longevity of this bullish trend remains uncertain amid ongoing economic and political dynamics.
