Trump Reversals Spark S&P 500 Rebound

What It Will Take for the S&P 500 to Reclaim Record Highs—and for Other Indexes to Recover

Wall Street isn’t known for subtle reactions, and the recent market swings are a case in point.

The S&P 500 rallied sharply on Thursday, officially climbing out of correction territory by closing more than 10% above its April 8 low—reached shortly after President Trump’s April 2 tariff announcement, which rattled global markets. That low marked the bottom of a sharp selloff driven by renewed trade tensions and fears of economic fallout.

A key turning point came when the Trump administration paused new tariffs for most countries (excluding China), calming market nerves. From that April low to Thursday’s close, the S&P 500 recovered an eye-popping $4.253 trillion in market value, according to Dow Jones Market Data.

Still, the index remains 10.7% below its February record high, and broader uncertainty continues to hang over the markets.

Jamie Cox, managing partner at Harris Financial Group, attributed much of the volatility to the surge and subsequent decline in the Cboe Volatility Index (VIX)—Wall Street’s “fear gauge”—which soared above 50 during the worst of the selloff but has since retreated to around 20. “When volatility unwinds, stocks tend to rebound just as dramatically,” he noted.

Adding to the bullish momentum was Trump’s recent softening tone toward Federal Reserve Chair Jerome Powell, saying he doesn’t plan to remove him before his term ends in 2026. That reassurance helped settle investor jitters about central bank independence.

Pimco’s Libby Cantrill and Tiffany Wilding cautioned in a client note that firing Powell could actually hinder Trump’s goal of lower interest rates. Markets seemed to agree, as the 10-year Treasury yield fell six basis points Thursday to 4.32%, following its largest weekly move since 1987 just two weeks ago.

“The Fed’s direction weighs heavily on markets,” said Cox. “Removing uncertainty around Powell is a big stabilizing factor.”

Looking ahead, Cox said that progress on trade deals and a cooling of Fed tensions could help push stocks back toward record highs. With Congress returning next week, a breakthrough on budget negotiations and the debt ceiling could further lift investor confidence.

Still, much hinges on how the global trade landscape evolves. Cox expects negotiations with China to drag on, while deals with Europe and others may come together more quickly.

Where the major indexes stand now:

• S&P 500 rose 2% to 5,484.77
• Dow Jones Industrial Average gained 1.2% to 40,093.40—still short of the 41,410.15 level needed to exit its correction
• Nasdaq Composite jumped 2.7% to 17,166.04, but remains in a bear market. It must reach 18,321.50 to exit