The S&P 500 and Nasdaq Composite reached new all-time highs on Friday, driven by a surge in megacap tech stocks amid renewed AI optimism and expectations of a softer monetary policy stance from the Federal Reserve. Here's a breakdown of the key developments:
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The S&P 500 rose 0.2% to 6,154.81, surpassing its previous record of 6,147.43 set on February 19.
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The Nasdaq Composite climbed 0.3% to 20,229.31, breaking past its former peak of 20,204.58 from December 16.
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This week’s rally was fueled by Micron’s upbeat forecast, which reinvigorated investor enthusiasm for AI, along with Nvidia’s new record high, reaffirming its status as the world’s most valuable company.
Market Sentiment Boosters:
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AI revival: Chipmaker Micron helped restore confidence in the sector, while Nvidia continued to lead gains in AI-linked stocks.
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Fed support: Dovish remarks from Federal Reserve officials signaled a more accommodative monetary stance, easing recession fears.
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Geopolitical relief: A US-brokered ceasefire ended a 12-day conflict between Israel and Iran, helping cool crude prices and inflation worries.
Backdrop of Recovery:
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After Trump’s April 2 tariffs announcement and its rocky implementation, both the S&P 500 and Nasdaq had teetered near or entered bear market territory:
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The S&P 500 had dropped 19% from its February high.
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The Nasdaq plunged 26.7%, entering a confirmed bear market.
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A shift followed after new US trade agreements with the UK and China, helping calm global recession fears.
Since Bottoming Out (April 8):
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S&P 500 is up 23.5%.
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Nasdaq has surged about 32%, led by Microsoft, Nvidia, Meta, and Amazon.
According to standard definitions, the Nasdaq will officially exit its bear market and enter a bull phase if it closes above 20,173.89, the record from December 16 — a level it just surpassed intraday.
Year-to-Date (as of Thursday):
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S&P 500 and Nasdaq are up 4.4%.
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Dow Jones Industrial Average has gained 2%, still trailing 3.7% below its record high.
In summary, AI momentum, easing inflation fears, and diplomatic breakthroughs have turned the tide for US markets, with tech leaders once again powering a broader rally and hinting at the start of a new bull cycle.
