Here’s what the S&P 500 needs to recoup record ground and for the other major stock indexes to exit their corrections

The stock market has recovered 10% from its recent low sparked by President Donald Trump’s tariff escalation, much of which was later walked back.

Talk doesn’t come cheap on Wall Street.

The S&P 500 index on Thursday was able to exit correction territory, ending at least 10% above its recent low set in the wake of President Donald Trump’s April 2 “liberation day” tariffs.

The reaction on Wall Street to those additional duties was swift and ugly, with the S&P 500 tumbling to a new low on April 8, as the below chart shows.

The following day, April 9, saw a worrying liquidity pinch and the bond market in chaos, factors Trump spoke to when announcing a 90-day pause on new tariffs for most countries, except China.

From the April 8 low to the close on Thursday, the S&P 500 recouped a stunning $4.253 trillion in terms of its market capitalization, according to Dow Jones Market Data.

So, was that the market low? The S&P 500 remains 10.7% below its record closing high from February, but its recent sharp decline and similarly dramatic recovery wasn’t entirely surprising, according to Jamie Cox, managing partner for Harris Financial Group.

Cox has been following the extreme jump in Wall Street’s Cboe Volatility Index, or “fear gauge,” to above 50 during the recent tumult, but also its quick retreat to around 20. “When that unwinds, you are going to have sharp moves in the opposite direction,” he said of stocks.

Stocks surged over the past three days as Trump walked back his latest attacks against Federal Reserve Chair Jerome Powell, saying he has no intention of firing the central bank boss before his term ends in May 2026.

Pimco’s Libby Cantrill, head of public policy, and economist Tiffany Wilding said that if “the Trump administration’s goals is lower interest rates for the real economy, then firing Powell might hinder, not help,” in a Thursday client note.

Indeed, the all-important 10-year Treasury yield fell another six basis points to 4.32% on Thursday, settling down after it logged itslargest weekly move since 1987about two weeks ago.

“Markets rise and fall based on what the Fed might do,” Cox said. “Putting that to rest is a big deal.”

Looking ahead, if Trump can ink a few trade deals over the next few months and avoid further Fed attacks that had “a lot of people running for the hills,” Cox said he expects stocks to regain record territory.

The return of Congress next week, after a two-week recess, could help bring further optimism back to Wall Street if progress toward passing a budget deal can be made, including resolving the U.S. debt-ceiling issue.

On the flip side, the U.S. economy and those of other nations will hinge on where tariffs shake out. Cox said he anticipates negotiations with China to play out over several years, while deals with European nations and other countries start emerging sooner.

The S&P 500 rose 2% on Thursday, ending at 5,484.77, while the Dow Jones Industrial Average gained 1.2%, ending at 40,093.40. The Dow needs to close above 41,410.15 to exit its correction, according to Dow Jones Market Data.

The Nasdaq Composite Index gained 2.7%, closing at 17,166.04. It is in a bear market, after a drop of at least 20% from its prior peak, and would need to finish at 18,321.50 or higher to exit.