New york: The S and P 500 and Nasdaq concluded the second quarter of the year with record highs, driven by tariff uncertainty that began in April when US President Donald Trump announced extensive reciprocal tariffs.
According to Anadolu Agency, the announcement triggered significant sell-offs, causing the S and P 500 and Nasdaq indexes to plummet to 15-month lows in April. However, the indexes rebounded as tariff delays and negotiations progressed, fostering optimism for new agreements.
After Trump's presidential election victory in November last year, US stock markets surged with expectations of corporate tax cuts and regulatory reforms, reaching unprecedented highs. The Dow Jones hit a record high of 45,014.04 points in December, while the Nasdaq closed the month at an all-time high of 20,173.89, and the S and P 500 peaked at 6,144.15 points in February.
In the first quarter, the Dow Jones fell 1.3%, the S and P 500 dropped 4.6%, and the Nasdaq declined 10.4% amid concerns of a trade war and tariff threats. Tensions between Trump and countries like China, Canada, and Mexico heightened uncertainties in supply chains and markets, with China's retaliations exacerbating fears of a global trade war, particularly impacting the technology-heavy Nasdaq.
On April 4, two days after Trump's tariff announcement, the Dow Jones, S and P 500, and Nasdaq experienced significant losses of 9.3%, 10.5%, and 11.4%, respectively, wiping out approximately $6 trillion from US markets. This marked the highest daily losses since the pandemic.
Despite extending losses to Asian stocks and crypto markets, the feared levels were not reached. By April 7, the Dow Jones, S and P 500, and Nasdaq hit their lowest points of the year, reflecting declines of 18.7%, 21.3%, and 26.7% from previous highs.
President Trump urged calm and encouraged continued investment, assuring the public that all would be well. On April 9, he announced a 90-day tariff pause except for China, which led to a market rise as reciprocal tariffs on Beijing increased to 125%. This announcement prompted the Dow Jones, S and P 500, and Nasdaq to rise nearly 8%, 9.5%, and over 12%, respectively, marking significant gains.
By the end of April, the Dow Jones had declined 3.17%, the S and P 500 had decreased 0.76%, while the Nasdaq recorded a 0.85% increase. In a surprising development, the US and China took steps to ease trade tensions in May, with both countries reducing tariffs, providing a boost to markets.
The Dow Jones gained nearly 4% in May, the S and P 500 over 6%, and the Nasdaq 9.6%, supported by strong financial results from major corporations and the resilience of the US economy, which alleviated recession fears.
In June, easing geopolitical tensions following a ceasefire between Israel and Iran fostered optimism for more trade agreements and potential Fed rate cuts. This optimism propelled the S and P 500 and Nasdaq to their highest ever points at 6,204.95 and 20,369.73, respectively.
The Dow Jones rose 4.3% in June, with the S and P 500 and Nasdaq gaining around 5% and 6.6%, respectively. Overall, in the second quarter, the indexes increased by 5%, 10.6%, and 18%, respectively. For the first half of the year, the Dow Jones climbed 3.64%, with the S and P 500 and Nasdaq up 5.5%.