The Blubber

Since President Donald Trump halted most of the retaliatory tariffs on April 9—reversing the course he set on April 2—the stock market has surged. The S&P 500 and Nasdaq have both posted double-digit gains, fueled by investor optimism that a less confrontational stance could pave the way for productive trade talks, easing the tariff burden on businesses and consumers.

Still, as markets climb, debate has intensified over whether the rally has legs. The S&P 500 has already recouped its April 2 losses, and some indicators now suggest the market may be overextended.

Concerns about a potential reversal have been raised by market veterans like Bill Gross and Paul Tudor Jones. But President Trump himself has remained upbeat. Following the Federal Reserve’s decision to hold interest rates steady at its most recent meeting, Trump took to the airwaves with strong words of support for the stock market—most notably on May 8, when he delivered his most forceful endorsement yet.

The rally has been widespread across sectors, but tech stocks have led the way after bearing the brunt of the sell-off sparked by the initial tariff news in early April.

Tech shares had already been under pressure due to speculation that the boom in artificial intelligence spending might be tapering. Since OpenAI’s ChatGPT became the fastest app to reach one million users in 2022, companies have dramatically increased their IT budgets to develop large language model-based AI systems and agentic AI tools.

Now, AI is being integrated across industries. Banks are deploying it to manage risk, manufacturers are using it to enhance quality control and optimize inventory, retailers are exploring it to improve supply chains and cut losses, and healthcare firms are leveraging it to discover new drugs. Even the military is testing AI’s potential applications in combat settings.