Nasdaq Composite also logs its first closing high since December
What’s the next catalyst to propel stocks higher from here?
The S&P 500 on Friday finished at its highest level on record — the latest development in what has been a remarkable comeback from the precipice of a bear market.
The large-cap benchmark index rose 32.05 points, or 0.5%, to end at 6,173.07 on Friday afternoon. The S&P 500 also booked its fastest-ever recovery into record territory after a decline of at least 15%, according to Dow Jones Market Data (see table below).
SOURCE: DOW JONES MARKET DATA
After plunging nearly 19% from its February peak to a low of 4,982.77 on April 8, the index has mounted a powerful comeback as President Donald Trump has softened his stance on sweeping tariffs. Meanwhile, a cooler-than-expected consumer-price index report for May, tumbling oil prices and easing tensions between Israel and Iran lifted market sentiment.
Technology stocks have been at the forefront of the market’s rebound since early April. The tech-heavy Nasdaq-100, which notched its own first record close since February on Tuesday, has popped nearly 32% since bottoming on April 8, while the S&P 500 gained 23.7% in the same period, according to FactSet data.
The Nasdaq Composite Index on Friday also finished at its first record closing high since Dec. 16, 2024. The tech-heavy index rose 105.55 points, or 0.5%, to settle at 20,273.46, according to FactSet data.
The tech-fueled rally has left the Dow Jones Industrial Average and other less tech-focused stock indexes in the dust. The 30-member Dow has only risen around 16% since early April and is still sitting 2.7% below its record high, according to FactSet.
“We’re back to where we were early in the year simply because all the really bad things that were supposed to happen under the weight of tariffs haven’t happened, and the market has just normalized the fact that the economic data has been pretty resilient,” said Brian Mulberry, client portfolio manager at Zacks Investment Management.
“With all those things being in a straight line, the market has come back to where it was in late February before all the volatility started,” he told MarketWatch in a phone interview Thursday.
While it’s very encouraging to see stocks back near record highs, there are plenty of questions on the next catalyst needed to propel them further from here, noted Paul Stanley, chief investment officer at Granite Bay Wealth Management.
With tensions in the Middle East having eased for now, market attention is also shifting back to looming domestic policies — particularly those tied to Trump’s agenda, Mulberry said.
For example, investors are closely monitoring the self-imposed July 4 deadline for getting Trump’s signature tax-and-spending law, the One Big Beautiful Bill Act, passed. While dialing up pressure on lawmakers, the White House recently signaled potential wiggle room on Trump’s July 9 deadline for negotiations on “reciprocal” tariffs imposed on global trading partners except for China.
Looking further ahead, the start of second-quarter earnings season in mid-July will also provide a fresh gauge for investors on “how companies have grappled with tariff uncertainty during the months of April and May,” which were months with “extreme headline risk” on tariff uncertainty, Stanley said.
U.S. stocks finished higher on Friday in volatile trading despite President Trump’s post on social media about terminating trade discussion with Canada. Earlier, the president said the U.S. and China have signed an agreement on trade, without giving further details.
The Dow gained 432.43 points, or 1%, to end at 43,819.27 on Friday. The Nasdaq Composite and the S&P 500 were each up around 0.5%, according to FactSet data.