Stunning turnaround: The stock market is on the verge of an all-time record

by John Towfighi
June 26, 2025

The S&P 500 is on the cusp of a record high. That’s a remarkable change of events, since the index was on the brink of a bear market just two months ago.

US stocks on Wednesday were mixed, with a new high for the S&P 500 less than 1% away. The Dow closed lower by 107 points, or 0.25%. The broader S&P 500 was flat, and the tech-heavy Nasdaq Composite gained 0.31%.

The S&P 500 had soared 2.1% across the past two days as investors welcomed a ceasefire, albeit fragile, between Israel and Iran. As the stock market has climbed back toward record highs, investors are wondering whether there is room for stocks to climb higher or if further roadblocks lie ahead.

The S&P 500 is less than 1% away from an all-time high. - Yuki Iwamura photo

The S&P 500 on Tuesday had closed just 0.85% away from an all-time high before closing flat on Wednesday.

“As Middle East tensions de-escalate, the focus will return to more fundamental concerns for investors such as tariffs, earnings, the federal deficit and President Trump’s One Big Beautiful Bill,” said Chris Brigati, chief investment officer at SWBC, in a Tuesday note.

Despite plenty of headwinds, including the possibility of reignited inflation from higher tariffs this summer, some Wall Street analysts believe stocks still have room to rise.

“We are not looking for a massive rally from current levels, but believe that the path of least resistance is a grind higher,” said Mohit Kumar, an economist and strategist at Jefferies, in a Wednesday note.

A steep drop and a sharp rally

The US stock market has been on a wild ride this year. After tumbling into correction in March and flirting with a bear market in April, the index recouped its losses in May and June and is up more than 3.5% year-to-date.

The S&P 500 had entered the year hitting record high after record high. The index hit its last record high on February 19 as Wall Street rallied at the start of Trump’s second term.

The index began to tumble in March and April as the president unveiled his tariff policy, and it’s been trying to claw its way back toward a new record high since.

After Trump’s “Liberation Day” tariffs on April 2, the S&P 500 closed at its lowest level this year on April 8, down 18.9% from its February record high. At its low, the S&P 500 had shed $9.8 trillion in market value since its record high, according to FactSet data.

The S&P 500 rallied sharply in April after Trump walked back his massive “reciprocal” tariffs. The index then gained 6.15% across May as the rebound rally accelerated, posting its best monthly gain since November 2023 and its best performance in May since 1990. The benchmark index is up 3% so far in June, recovering trillions of dollars in market value since April.Story Continues