#MarketRebound

The U.S. stock market staged a dramatic rebound in mid-2025, erasing earlier losses triggered by President Trump's aggressive tariff announcements. The S&P 500 surged 18% from its April low, while the Nasdaq outperformed, driven by tech giants like Nvidia and Microsoft benefiting from AI demand . Key factors include:

1. Tariff Relief: A 90-day delay in implementing "Liberation Day" tariffs (initially up to 24% on global imports) spurred optimism, though the effective rate remains at a decades-high 15% .

2. Valuation Concerns: The S&P 500 now trades at a forward P/E of 22, well above historical averages, raising risks if corporate earnings falter amid slowing GDP growth (projected at 1.6% for 2025) .

3. Persistent Risks: Unresolved trade negotiations, potential stagflation (inflation near 4%), and Fed rate uncertainty could reignite volatility .

Experts urge caution, advocating diversification and long-term strategies over market timing .