Retail-Driven Rally Reshapes the Nasdaq, S&P 500, and Dow
Retail investors have redefined equity momentum in 2025. With a record $155 billion in inflows to U.S. stocks and ETFs, individual traders now move markets. Even amid President Donald Trump’s aggressive tariff regime, dip-buying remained relentless. The Nasdaq 100 is up 7.8% YTD, but if you only bought after red sessions, you’d be sitting on a 31% return, according to Bank of America’s dip-strategy model. That’s the best mid-year return for the strategy since the start of 2020, and second-highest since 1985. The S&P 500 and Dow have also climbed to all-time highs, powered by a new “buy-the-fall” religion among traders who no longer fear volatility — they feed on it.
Trump’s Tariffs, the Tax Bomb, and Market Euphoria
After a market shock in April sent the S&P 500 nearly 19% below its February peak, equities reversed hard following Trump’s 90-day pause on tariffs. That reversal turned into one of the fastest rallies on record — a 19.8% surge in 50 days. Trump’s tax-and-spending bill, passed July 4, added fuel to the fire. While it’s projected to tack on $3.4 trillion in debt over the next decade, retail traders cheered the fiscal push, ignoring deficit warnings from institutions. June nonfarm payrolls beat expectations at +147,000, and the unemployment rate fell to 4.1%. These bullish signals drowned out structural risks. Treasury yields ended the week at 4.351%, up on the day, but well off January highs near 4.8%.
Nasdaq and S&P 500 Approach Exhaustion Zones
Both the Nasdaq 100 and S&P 500 are now technically overbought. The Nasdaq staged a jaw-dropping 37% rally from April lows, and the S&P 500’s 50-day rebound ranked among the top 10 since 1950. Key resistance on the Nasdaq sits at 22,167, with intermediate support zones at 21,611 and deeper at 20,673. The S&P 500 faces the next support test at 6,145, then 6,000, and finally 5,782–5,864. If bulls can hold those levels, this trend could extend into Q3 — but any breakdown through that final support band will likely trigger a macro reassessment.
Alphabet (NASDAQ:GOOGL) Trades at Half Price Relative to Peers
Alphabet remains wildly undervalued despite strong top-line and bottom-line growth. With a forward P/E near 15.6, the stock trades at a 50% discount to Meta, and well below Microsoft and Amazon. Yet Q1 numbers prove the strength: Alphabet delivered the second-highest EPS growth among its mega-cap peers. If GOOGL simply trades up to the group average forward P/E of 31.3, the stock has a potential 68% upside. For a company still dominating digital ad revenue, this kind of discount isn’t just unwarranted — it’s irrational. Buy and accumulate.
Reddit (NYSE:RDDT) Balances Explosive Growth with Lofty Expectations
RDDT is down 30% from its all-time high, but its fundamentals tell a different story. Q1 revenue soared 61% year-over-year, and revenue per user jumped 23%, yet the stock trades at ~16x 2025 sales — pricing in aggressive growth without margin for error. Reddit’s 400 million weekly active users and community-driven product discovery remain competitive advantages, but valuation demands consistent outperformance. For long-term believers, it’s worth holding — but this is not a market-neutral bet. It’s growth with teeth.
Paycom (NYSE:PAYC) Suffers Self-Inflicted Stall from Beti Rollout
Paycom’s Beti product was supposed to be a game changer — but it became a growth anchor. The company’s shift toward automated payroll services led to cannibalization of legacy revenue streams. The result: revenue grew only 6% in Q1, down sharply from 30%+ annual growth pre-2023. PAYC trades at ~26x forward earnings, which might be justified if revenue inflected higher — but with a weakening labor market and no clear top-line spark, this valuation looks misplaced. Risk is rising. Sell and rotate.
Oklo (NYSE:OKLO) Emerges as Nuclear's Front-Runner for AI-Powered Energy Demand
OKLO has posted an eye-popping 559% YTD gain, thanks to unmatched exposure to the AI-data center power race. With signed letters of intent totaling 750 MW and a nonbinding 12 GW deal with Switch through 2044, Oklo isn’t just a speculative nuclear play — it’s potentially the cornerstone of next-gen energy infrastructure. President Trump’s executive orders in May backing nuclear development add further credibility. Still, the company has no meaningful revenue yet. Momentum is real, but this is a high-risk, high-beta stock. Speculative buy for those seeking exposure to AI-fueled energy.
Berkshire Hathaway (NYSE:BRK.A) Enters Post-Buffett Phase with Cash War Chest
Warren Buffett’s exit as CEO marks the end of an era, but Greg Abel, his successor, inherits $345 billion in cash, full board support, and a legacy of defensive strength. BRK’s sprawling portfolio across insurance, rail, industrials, and public equities gives it unparalleled optionality during downturns. While some investors fret over the complexity and dividend absence, Buffett remains Chairman, ensuring continuity. At these levels, Berkshire isn’t built for breakouts — but it’s primed to pounce during future pullbacks. Hold with confidence.
Tariff Threat Looms Over Europe and Asia as July 9 Deadline Nears
Trump’s 90-day “Liberation Day” tariff pause expires July 9, and he’s already promised to send out tariff letters to at least 12 countries, including the EU, Japan, and India. The European Commission doesn’t expect a full trade deal by the deadline — only a “bare-bones” agreement. With so much uncertainty still in the pipeline, the next wave of volatility could erupt any moment. Equity investors must stay nimble, especially in export-heavy sectors and multinationals exposed to supply chains in Asia and Europe.
Musk’s Political Pivot Shakes Tesla (NASDAQ:TSLA) as EV Credits Expire
Elon Musk’s announcement of the new “America Party” wasn’t the only shocker — the new budget bill eliminated U.S. EV credits after September 30 and axed zero-emission incentives immediately. That’s a direct hit to Tesla’s margins and domestic sales. TSLA stock dropped 2.6% for the week, while Uber (NYSE:UBER) and Mobileye (NASDAQ:MBLY) surged post-robotaxi launch. TSLA sits between its 200-day and 50-day moving averages, and the political heat will likely pressure sentiment further. Near-term trend: bearish.
Sectors in Rotation: Chips, Jets, Metals Outperform; Discretionaries Lose Steam
ETF performance confirms the rotation underway. XME (Metals & Mining) jumped 5.6%, JETS (Airlines) gained 5.3%, and IGV (Software) hit new highs. Meanwhile, defensive XLV (Health Care) and XLE (Energy) posted solid but modest gains. Industrials and Discretionaries, which led earlier this year, now look frothy and vulnerable to macro shifts. Financials (XLF) hit new highs — confirming risk-on mood, but rotation is visible.
Final Index Ratings Based on 2025 Momentum and Risk
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S&P 500 (SPX): Hold/Bullish – Strong rally, but overbought. Watch 6,145 and 6,000 for re-entry.
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Nasdaq 100 (NDX): Hold/Neutral – Extended run; pullback possible to 21,611 before upside resumes.
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Dow Jones (DJIA): Buy – Still room to reclaim record highs. Trailing peers, ripe for rotation flows.
