S&P 500 and Nasdaq close at record highs

The S&P 500 and Nasdaq closed at record highs on Friday. This marked a significant milestone in the US stock market’s recovery since facing bear market territory in early April. The S&P 500 gained 0.5%, closing at 6173.07.

Q2 saw widest outperformance for S&P 500 Growth Index versus Value Index in history of two indices dating back to mid-1990s; S&P 500 Growth index rallied 18.8% in Q2 versus gain of 2.5% for S&P 500 Value Index; 16.3 pp spread blew away next-best quarter, which was 13.5 pp spread… pic.twitter.com/LpEZDUx7bb

— Liz Ann Sonders (@LizAnnSonders) July 1, 2025

This was the first new high since February 19. The Nasdaq Composite also hit a record, gaining 0.5%. It was the Nasdaq’s first all-time high since December 16.

Since 1928, the S&P 500 has posted an average overall gain of 1.7% in July…historically, the best performing month of the year pic.twitter.com/0TcbcKhlJL

— Liz Ann Sonders (@LizAnnSonders) July 1, 2025

The Dow Jones Industrial Average rose 432 points, or 1%. However, it still needs to gain about 1,200 points, or 2.7%, to reach its all-time high. All three indices—Dow, S&P 500, and Nasdaq—posted their biggest weekly gains in six weeks.

#MarketAlert | Wall Street kicks off H2 with a tech selloff—Dow jumps, Nasdaq slides, eyes now on jobs data & Trump’s tax bill#StockMarket #DowJones #Nasdaq #TechStocks #USJobs #Trump #MarketUpdate pic.twitter.com/ju7fzbkzwG

— ET NOW (@ETNOWlive) July 2, 2025

The S&P 500 dropped to its low point on April 8 before rebounding over the past two and a half months. Trade developments boosted market sentiment. The Trump administration recently paused its “reciprocal” tariffs for 90 days, sending markets surging. New frameworks for trade deals with the UK and China gave investors hope that the harshest trade policies were behind them.

Record highs reflect market rebound

Treasury Secretary Scott Bessent expressed optimism. He suggested that trade negotiations with other countries could conclude by Labor Day. This would provide a more relaxed framework for future deals. The tech sector remains a primary catalyst for the market’s resurgence. It has been fueled by the AI boom and deregulation efforts. Hopes for Federal Reserve rate cuts have also supported stocks in recent months. Despite recent gains, challenges remain. Consumer spending in the first quarter of 2025 was at its weakest rate in over four years. Ongoing tariffs could raise prices, potentially hurting economic growth. Valuations are surging above earnings expectations. The S&P 500’s price-to-earnings ratio surpassed 23. This suggests stocks are becoming quite expensive relative to their profit expectations. While markets celebrated the record closing, uncertainty about the future remains. It is not clear how long the current momentum will continue.