Blink, and you might have missed the market rally. The S&P 500 has surged over 20 per cent from its April low, erasing its losses for 2025. The Nasdaq is up nearly 30 per cent in just a few weeks.
Too fast? Possibly. Despite Donald Trump‘s tariff U-turn, US tariffs remain at their highest level since 1934. Recession odds on prediction market Polymarket are down, but still elevated at around 40 per cent.
Beyond tech, earnings are wobbling, with first-quarter strength largely concentrated in mega-cap stocks like Alphabet, Amazon, Apple, Meta and Microsoft.
However, this rally doesn’t feel like a mere bear market bounce. The Carson Group’s Ryan Detrick notes there have been only three years – 1982, 2009, 2020, all major market bottoms – when stocks turned positive after clawing back from such steep losses. A majority of S&P 500 stocks have also hit a 20-day high, a rare breadth thrust that usually signals durable upside (stocks have been higher a year later in 29 of the last 30 instances).
The current strength reflects enormous relief that Trump still sees the stock market as an important scorecard.
Trump realised he was “toying around with liquid nitroglycerine and it was time to back off”, says market strategist Ed Yardeni. “The markets threw a tantrum, and got what they wanted.”
Even if stocks falter again, this surge is a reminder: nervous investors can’t wait for uncertainty to lift before getting back into stocks. As CFRA strategist Sam Stovall notes: “If 0 is knowing nothing and 10 is knowing everything, Wall Street nibbles at three and does full-blown buying at five.”
