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:

Gold Suffers Sharpest Drop Since 2021 as Trade Tensions Ease and Fed Uncertainty Fades Gold prices saw their steepest single-day drop in nearly four years on Wednesday, as a shift in U.S. trade policy rhetoric and reduced fears over the Federal Reserve’s leadership deflated the metal’s momentum. After a blistering rally that saw gold top $3,500 an ounce earlier this week, prices tumbled $125.30, or 3.7%, to close at $3,294.10 — the biggest one-day percentage drop since June 2021, according to Dow Jones Market Data. Tuesday’s session had already hinted at weakness, with gold futures pulling back from a record intraday high of $3,509.90 to settle at $3,419.40. The decline followed signs that the White House may ease tariffs on Chinese imports, according to reports, and a softening stance from former President Trump toward Fed Chair Jerome Powell. That double shift eased fears that had fueled gold’s rally and reduced demand for the metal as a safe-haven asset. “Gold’s been riding the trade-war narrative, and that leg just got wobbly,” said Stephen Innes, managing partner at SPI Asset Management. He added that the rally had been driven more by headlines and speculation than fundamentals, and with those headlines cooling, the rally is deflating fast. Jonathan Krinsky of BTIG noted that gold had climbed to more than 27% above its 200-day moving average — a historically extreme level that often signals overbought conditions and a potential “blow-off” top. When that threshold has been reached in the past, gold has typically pulled back toward its average in the following months. Despite the sharp correction, many analysts see this as a healthy pause rather than a definitive peak. “There’s nothing indicating that $3,500 is a hard top,” said Michael Armbruster of Altavest. “We’re still in an uptrend — this looks like a standard correction within a bull market.” Jim Wyckoff of Kitco.com agreed, suggesting the rally may be near the end of its cycle in terms of timing, but not necessarily in price. “Markets often experience larger swings near the end of a bull phase, but gold could still surprise to the upside before it’s over.” Gold had been on a tear since 2022, rising from around $1,600 an ounce on the back of geopolitical turmoil, high inflation, and fears over global economic stability. Even after this week’s drop, the metal remains up significantly, with gains of over 25% year to date. “This correction doesn’t change the underlying bullish thesis,” said Trevor Yates, senior investment analyst at Global X ETFs. “It’s more about investor positioning than any shift in fundamentals.” He noted continued demand from central banks and ongoing economic uncertainty as key supports for gold. With the metal still outperforming equities in 2025 and broader market volatility persisting, analysts suggest the recent dip may offer a strategic entry point for long-term investors