S&P 500 and Nasdaq Break Records as Dow Roars Past 43,900
The S&P 500 (SPX) surged to a historic close of 6,183.65, rising 0.66% on the day and climbing more than 20% from its April low, when it was down nearly 18% for the year. That reversal has now put the index up 5% YTD, driven by easing trade tensions, bullish bets on Federal Reserve rate cuts, and the explosive return of AI stocks. The Nasdaq Composite (IXIC) soared to 20,293.29, solidifying a full-scale bull market rally, up over 20% from its April bottom. The Dow Jones Industrial Average (DJIA) leapt 532 points, or +1.2%, to end at 43,901.35, its strongest level in months, supported by industrials, discretionary, and real estate strength.
Artificial Intelligence Megacaps Lead the Charge: NVDA, MSFT, META
AI giants continued their domination. Nvidia (NVDA) hit another all-time high, closing at $157.61, gaining 1.63% Friday and up over 15% YTD. Its market cap has now reached $3.86 trillion, with Wall Street anticipating it may soon break the $4 trillion barrier. Microsoft (MSFT) followed closely with a $3.71 trillion valuation. Analysts from Wedbush expect both to cross into $5 trillion territory within 18 months.
Meta Platforms (META) has rallied 25% in 2025, emerging as one of the year’s top tech performers. In contrast, Apple (AAPL) has lagged, rising just 0.45% this week but still down 19% for the year, missing out on the rally. Meanwhile, Amazon (AMZN) has barely broken even for the year, only recently turning positive (+0.2% YTD).
AI Infrastructure Demand Powers Chip Sector Higher
A recent JPMorgan CIO survey shows AI hardware spending will grow from 5.9% to 15.9% of total IT budgets in three years. Beneficiaries include Advanced Micro Devices (AMD), Broadcom (AVGO), Marvell Technology (MRVL), Micron (MU), Arm Holdings (ARM), and Astera Labs (ALAB). The PHLX Semiconductor Index (SOX) is up 14% over the past month, highlighting this new multi-year capital cycle.
CoreWeave Makes Power Play with Core Scientific Deal
CoreWeave, a key Nvidia-backed AI infrastructure firm, surged +336% quarter-to-date and +45% this month, as it reasserts dominance with its bid to acquire Core Scientific. Already Core Scientific’s largest tenant, CoreWeave controls 590MW of infrastructure and could consolidate energy and compute assets. Analysts see the acquisition as a direct move to ensure access to power capacity for hyperscale AI growth.
Trade Truce Fuels Optimism: Rare Earth Deal with China Eases Tensions
President Donald Trump confirmed a new framework signed with China, allowing the U.S. to receive rare earth shipments and reducing tech export restrictions. Commerce Secretary Howard Lutnick said agreements with 10 major trading partners are imminent. While the July 9 tariff deadline looms, the administration has hinted at an extension. Treasury Secretary Scott Bessent noted that deals with most major economies could be completed by Labor Day.
These updates follow Trump’s earlier pivot away from tariff escalation. At the April low, markets were pricing in severe global friction. Now, with reciprocal tariffs paused, risk appetite has returned. The S&P 500 has added over 1,200 points since that bottom.
Inflation Accelerates, Yet Rate Cut Bets Gain Ground
The core PCE index rose 2.7% YoY in May, ahead of forecasts (2.6%) and up from April’s 2.6%. Month-on-month, it climbed 0.2%, doubling expectations. At the same time, U.S. consumer spending declined, the largest drop of 2025 so far—adding fuel to the dovish narrative. Traders now see a 20.7% probability of a rate cut in July, up from 14.5% last week.
This contradictory data has divided the Fed. Hawks cite sticky inflation, while doves point to weakening demand and deflationary risk from tariffs. Powell’s credibility may come under pressure if the labor market softens while price growth stays elevated.
Tesla Robotaxi Boost Fails to Offset Broader Weakness
Tesla (TSLA) jumped over 8% on Monday after launching its robotaxi service in Austin, which Elon Musk labeled a “success.” However, despite the bounce, TSLA remains down ~19% YTD. Investors are weighing its potential in the autonomous space versus falling EV sales in Europe and leadership instability following the departure of sales chief Omead Afshar.
Uber and Lyft Downgraded as AV Threat Intensifies
Both Uber (UBER) and Lyft (LYFT) shares fell ~3% Friday after Canaccord Genuity downgraded them to Hold. Analyst George Gianarikas warned that just 411,000 robotaxis could replace their combined driver workforce in the U.S., leaving their hybrid human-robot model at risk of obsolescence. Uber’s integration with Waymo and Lyft’s work with Mobileye may not be enough to stave off AV disruption.
Sentiment Rebounds as Inflation Expectations Drop
The University of Michigan’s June survey shows sentiment rose to 60.7, up 16.3% from May. One-year inflation expectations fell from 6.6% to 5%, and five-year projections dipped to 4%, signaling a growing belief that price pressures are stabilizing.
Despite geopolitical risks and trade uncertainties, consumers are feeling more confident—though survey director Joanne Hsu cautioned that Middle East tensions still loom large in the background.
Nike Stock Soars 15.8% on Solid Guidance Despite Tariff Hit
Nike (NKE) exploded higher, gaining 15.8%, its best day in over a year. The company projected a more modest single-digit revenue drop in Q1 versus the 12% decline just posted. CFO Matthew Friend revealed that Trump’s new tariffs will cost Nike roughly $1 billion, impacting margins by 100bps, but said the firm would “fully mitigate” those costs. Nike is also reducing its China dependency—now at 16% of its U.S. imports.
This momentum lifted peers like Deckers Outdoor (DECK), up 2.7%, and Lululemon (LULU), up 1.6%.
Alphabet Eyes Recovery After Rough 2025 Start
Alphabet (GOOGL) has dropped 9% YTD, underperforming peers. But a new Jefferies report says fears over AI competitiveness are “overblown,” and kept its Buy rating with a $210 price target—a potential 20%+ upside from current levels. With AI spend growing and YouTube monetization improving, Alphabet could soon reclaim investor favor, particularly as Nvidia, Microsoft, and Meta approach saturation valuations.
Big Banks and Energy Join the Rally: Goldman Hits New High
Goldman Sachs (GS) gained +2.2% to close at $693.29, nearing a new all-time high, and lifted bank ETFs like SPDR Bank ETF (KBE) and Regional Bank ETF (KRE). The S&P’s communication services, materials, and energy sectors also contributed to gains, with each rising over 1% on Thursday.
