U.S. stocks rise to the brink of a record and recover nearly all their 20% springtime drop

Traders Niall Pawa, left, and Joseph Lawler work on the floor of the New York Stock Exchange, Wednesday, June 25, 2025. (AP Photo/Richard Drew)

NEW YORK — The U.S. stock market ran up to the edge of another record on Thursday.

The S&P 500 climbed 0.8 per cent and is sitting just 0.05 per cent below its all-time closing high, which was set in February. It briefly topped the mark during the afternoon in the latest milestone for the index at the heart of many 401(k) accounts, which had dropped roughly 20 per cent below its record during the spring on worries about U.S. President Donald Trump’s tariffs.

• Latest news & updates on tariffs and the trade war here

The Dow Jones Industrial Average rallied 404 points, or 0.9 per cent, and the Nasdaq composite gained one per cent.

McCormick, the seller of cooking spices, helped lead the way and jumped 5.3 per cent after delivering a better-than-expected profit report. The company also gave a forecast for profit over its full fiscal year that topped analysts’ expectations, including planned efforts to offset increased costs caused by tariffs.

Over the longer term, it’s been big technology stocks that have led the market for years and since the S&P 500 hit a bottom in April.

Chip company Nvidia, which has been the poster child of the frenzy around artificial-intelligence technology, added 0.5 per cent. It’s the most valuable company in the U.S. stock market after rushing 61 per cent higher since April 8, towering over the S&P 500’s gain of 23 per cent. Another AI darling, Super Micro Computer, rose 5.7 per cent to bring its gain since April 8 to 55 per cent.

Micron Technology, which sells computer memory and data storage, swung between gains and losses after reporting stronger profit and revenue for the latest quarter than analysts expected. CEO Sanjay Mehrotra said it’s seeing growing AI-driven memory demand, and the company gave a forecast for profit in the current quarter that topped analysts’ expectations. Its stock ended the day down one per cent.

All told, the S&P 500 rose 48.86 points to 6,141.02. The Dow Jones Industrial Average rose 404.41 to 43,386.84, and the Nasdaq composite gained 194.36 to 20,167.91.

Wall Street’s worries about Trump’s tariffs have receded since the president shocked the world in April with stiff proposed levies, but they have not disappeared. The wait is still on to see how big the tariffs will ultimately be, how much they will hurt the economy and how much they will push up inflation.

The economy so far seems to be holding up OK, though slowing, and more reports arrived on Thursday bolstering that. One said that orders for washing machines and other manufactured goods that last at least three years grew by more last month than economists expected. A second said fewer U.S. workers filed for unemployment benefits last week, a potential signal of fewer layoffs.

A third report said the U.S. economy shrank by more during the first three months of 2025 than earlier estimated. But many economists say those numbers got distorted by a surge of purchases of foreign products by U.S. companies hoping to get ahead of tariffs. They’re expecting a better performance in upcoming months.

Following the reports, Treasury yields swiveled up and down in the bond market before easing.

The yield on the 10-year Treasury fell to 4.24 per cent from 4.29 per cent late Wednesday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do, fell to 3.71 per cent from 3.74 per cent late Wednesday.

• S&P 500 market updates here

Analysts said yields may have felt pressure because of a report from The Wall Street Journal saying Trump could name his nominee to replace Fed Chair Jerome Powell unusually early, in an attempt to undermine him. That could hurt confidence among investors about the Fed’s capability to make unpopular decisions when it comes to fighting inflation.

Powell has been repeating recently that the Federal Reserve is waiting to see how Trump’s tariffs will affect the economy before deciding when to resume cutting interest rates. It has been on pause this year because lower rates can give inflation more fuel, along with providing the economy a boost.

Trump, though, has been adamant about wanting cuts to rates sooner and has insulted Powell repeatedly. Two of his appointees to the Fed have also said recently that they would consider cutting rates as soon as the Fed’s next meeting in July.

“Yields fell, the dollar weakened, and break evens rose, all suggesting that a puppet of the White House in the seat of the Chair could be bad for inflation,” said Brian Jacobsen, chief economist at Annex Wealth Management. But Jacobsen said decisions on interest rates would still rest with a committee of Fed officials, not just the chair, and other officials could possibly keep the new leader “in check if needed.”

In stock markets abroad, indexes were mixed in Europe following a mixed finish in Asia.

Japan’s Nikkei 225 rose 1.6 per cent, and South Korea’s Kospi fell 0.9 per cent for two of the bigger moves.

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Stan Choe, The Associated Press

AP business writer Elaine Kurtenbach contributed.