A possible thawing in US-China trade tensions boosted spirits after earnings from Apple and Amazon shed light on the likely cost of tariffs.

The S&P 500 peaked at 6,144 in February 2025. If the U.S. economy suffers a recession, the index could drop 31% to 4,239, provided its performance aligns with the historical average. That implies 23% downside from the current level. In short, history says the stock market would indeed crash if President Trump's tariffs cause a recession.

Wall Street has clawed back losses incurred after President Donald Trump imposed global tariffs a month ago, capping the longest winning streak in two decades for US stocks. Shares saw gains for the ninth day in a row for the first time since 2004 after a better-than-expected jobs report and rising hope of US-China trade talks.