By John Towfighi, CNN

New York (CNN) — The S&P 500 on Thursday flirted with closing at an all-time high, vying to complete a whirlwind roundtrip that saw the benchmark US stock index shed and then regain $9.8 trillion in market value across just four months.

The S&P 500 has been on a roller coaster ride this year as President Donald Trump’s trade policy has jolted markets.

The S&P 500 hit its last record high on February 19 before dropping as low as 18.9% by early April as tariff confusion rocked markets.

The index has soared more than 23% since hitting its low point on April 8, in what has been a remarkable come back from the precipice of a bear market.

US stocks were higher on Thursday. The Dow was higher by 399 points, or 0.93%. The broader S&P 500 gained 0.83% and the tech-heavy Nasdaq Composite rose 1.02%.

The S&P 500 needs to finish the day with a gain of 0.86% or more to notch a record high.

The Nasdaq on Thursday was also vying to close at an all-time high and surpass its previous record set on December 16. The tech-heavy index dropped into a bear market in early April before surging into a new bull market and gaining 32%.

Stocks pushed higher on Thursday morning amid a flurry of economic data, including data that showed a downward revision to how much the economy contracted in the first quarter.

That revised data is “backward looking,” and markets were higher on Thursday because they have already priced in the turmoil from earlier this year, Paul Stanley, chief investment officer at Granite Bay Wealth Management, said in an email.

“The market is betting on continued progress on trade and a de-escalation of tensions in the Middle East is giving investors confidence,” Stanley said.

While the S&P 500 and Nasdaq have recovered, the Dow is still 3.9% away from its record high set in December. The Dow this year has been weighed down by stocks like UnitedHealth Group (UNH), which is down 40%.

A $9.8 trillion recovery

At its low on April 8, the S&P 500 had shed $9.8 trillion in market value since its record high on February 19, according to FactSet data. The index is set to recover all of that market value as it tests a new record high.

Wall Street analysts are mixed on whether the S&P 500 can grind higher, or whether its return to record highs means there’s more downside to come.

As tensions in the Middle East have settled, the focus returns to Trump’s agenda. Lawmakers hope to deliver the president’s budget bill to his desk by July 4, and his administration’s deadline for trade deals is July 9.

“Meaningful progress on any of the two matters can bolster equities to fresh records,” José Torres, senior economist at Interactive Brokers, said in a note.

Investors in coming weeks will be focused on how tariff rates ultimately settle and whether Trump’s trade policy might reignite inflation.

“It would help stocks if we were to see a narrative shift from a focus on tariff, trade policy and geopolitics to company fundamentals,” Carol Schleif, chief market strategist, BMO Private Wealth, said in a note.

Despite the rally, the ratio of bullish versus bearish outlooks for the market remains below the historical average, Ed Yardeni, president of Yardeni Research, said in a note.

“That suggests more upside for the stock market since many investors remain wary and are not overly bullish,” Yardeni said.

“Greed” was the sentiment driving the market on Thursday, according to CNN’s Fear and Greed index. It was the highest reading on the index in two weeks.

Dollar stumbles to three-year low

The US dollar on Thursday dropped to its lowest level since February 2022 after a report by the Wall Street Journal that Trump plans to announce his pick for Federal Reserve Chair Jerome Powell’s successor as early as this fall.

Powell’s term ends in May 2026, meaning there would effectively be a “shadow” Fed chair in the months before his term expires.

The US dollar index, which measures the dollar’s strength against six major foreign currencies, was down 0.57% as of the afternoon.

“A candidate who is perceived as being more open to lowering rates in line with President Trump’s demands would reinforce the US dollar’s current weakening trend,” Lee Hardman, senior currency analyst at MUFG, said in a note.

The dollar index has tumbled nearly 10% this year. The euro and British pound this year have both hit their highest levels against the dollar in four years.

Francesco Pesole, an FX strategist at ING, told CNN that concerns about the Fed’s independence have been one of the contributing factors to the dollar’s broad decline this year.

“One of the key foundations of the strong dollar, of the dollar as a dominant currency globally, is to have an independent central bank,” Pesole said. “So, if [global investors] feel there is greater influence of politics into the Fed’s decisions, then they are pricing in a greater risk for the dollar.”

Greg Valliere, chief US policy strategist at AGF Investments, said in a note that Trump announcing Powell’s successor is a “terrible idea,” as it would be “sure to annoy and confuse the financial markets if there are two Fed chairs.”

“The damage to the Fed’s independence would be considerable if Trump becomes a monetary back-seat driver, second-guessing Fed policies this fall,” Valliere said.

The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.