In a year marked by volatility and rapid reversals, Dan Chung, CEO and CIO of Alger, remains upbeat on the trajectory of U.S. equities. Speaking on CNBC’s “Closing Bell,” Chung described the market’s recent performance as “the fastest recovery from the S&P being down 15% year to date since ’82,” referencing a swift rebound that has left the index within striking distance—less than 4%—of its previous highs.

Chung’s confidence is rooted in what he describes as a “remarkable turnaround” that comes on the heels of robust first-quarter earnings. “First quarter earnings, by the way, were quite strong—about 10% earnings growth on the S&P,” he told CNBC. This, he emphasized, confirmed that the underlying economy maintained substantial strength throughout the prior quarter, even as markets were whipsawed by policy-driven selloffs and trade uncertainty.

The broader context for this optimism lies in the perceived de-escalation of geopolitical risks, particularly between the U.S. and China. “Both sides are trying to come to some agreement, and they’re already making steps to sort of cooling down the heat,” Chung observed. As policymakers dial back the more extreme measures that rattled investors earlier in the year, Chung believes the market “can go on to new highs,” provided the environment remains relatively stable.

Importantly, Chung downplays recession fears that gripped the market just weeks ago. “We never really thought [a recession] would be in the cards, although many thought recession odds were at their highest in years,” he said. He credits continued fundamental growth trends, especially in artificial intelligence, for providing a counterpoint to the bearish sentiment that prevailed during the worst of the downturn. “Microsoft had an incredible quarter. Most of the AI-driven names had great quarters. That trend is underlying and growing,” he said. Even as smaller businesses paused major decisions due to policy uncertainty, consumer demand remained “relatively strong,” with some buyers accelerating purchases in anticipation of tariffs.

The conversation naturally turned to sector leadership, particularly the so-called “megacap” technology stocks—Microsoft, Nvidia, Amazon, Netflix, Broadcom, Meta, and Apple. These names, Chung noted, have “had such a dramatic comeback” and continue to underpin the S&P’s earnings engine. When asked whether these tech giants could continue to outperform or if investors should rotate into more cyclical, value-driven sectors, Chung was unequivocal about the enduring power of technology. “The tech sector is very special in the U.S. It’s driven a huge part of the earnings growth in the S&P over the last decade. And we don’t really see any fundamental trends that would derail that or cause a major shift into other sectors,” he asserted.

Chung’s remarks dovetail with his longstanding growth investing philosophy. In interviews featured by Alger and reported by Pensions & Investments, he has consistently argued that U.S. stocks are not overvalued and that growth—particularly in innovative sectors—remains the linchpin of market resilience and upside potential.

While acknowledging that temporary slowdowns could manifest in the next few quarters as businesses regain confidence, Chung maintains that the market is “fully prepared to look through that.” With macro risks receding and profit growth robust, his outlook amounts to a clear message: new highs for the U.S. stock market are not only reasonable—they are, in his view, the next logical milestone.

CNBC’s coverage of Chung’s market perspective underscores a broader sentiment among growth-oriented investors: as long as innovation remains a driving force, and as long as policy headwinds continue to abate, the “remarkable turnaround” in equities may have more room to run.