Surge in Tech Titans Lifts Market Cap to a Whopping $18.3 Trillion
Tech giants, known as the Magnificent Seven, experienced exceptional growth that sent their combined market cap soaring to an unprecedented $18.3 trillion. This group is comprised of industry leaders such as Apple, Microsoft, Amazon, Meta Platforms, Alphabet, and Tesla. Their colossal ascent in value emerged parallel to Wall Street’s robust performance, striking new all-time highs during the week of July 7. The principal catalyst behind this burgeoning optimism across the tech landscape was the prestigious achievement made by Nvidia.
Nvidia, the globally renowned chipmaker, served as the torchbearer in this rally. It emerged as the premier company worldwide to eclipse the $4 trillion market cap milestone. This feat was realized on the back of an unbroken seven-week bullish trend, marking the 11th week of the past 12 when the company experienced gains. Remarkably, from the lows observed in early April, Nvidia managed to almost double its stock price, a timeline spanning just a tad over three months.
The American stock indexes, the S&P 500 and Nasdaq, were not to be outdone in this flurry of financial successes. On July 10, both exchanges etched into their history new record highs. The consequent momentum amplified the skyrocketing market value of the Magnificent Seven tech titans, once again reinforcing the astounding $18.3 trillion collective worth.
However, amidst the euphoria of the thriving stock market, political uncertainties re-emerged. At the forefront, President Donald Trump announced the imposition of a 35% tariff on Canadian imports, effective from August 1. This revived apprehension of a potential trade war casted shadows over the financial landscape once more.
Alongside the high tariffs on Canadian goods, Trump indicated the possibility of imposing 15% to 20% blanket tariffs on most other trade partners of the U.S. Furthermore, an unveiling of a 50% duty on copper and Brazilian merchandise was announced, all programmed to take effect on the same day as the Canadian trade sanctions.
President Trump’s decisions didn’t come without controversy. Concurrently, he intensified his long-standing dispute with the Federal Reserve. In a brash move on July 9, he recommended a 3-percentage-point rate cut. His reasoning for this proposed cut was his claim that high interest rates were costing the U.S. an exorbitant $360 billion per annum per point.
Such monetary discourse met with caution from the central bank, as revealed in the minutes from the June 17-18 Federal Open Market Committee assembly. The majority of officials attending this meeting expressed a greater inclination towards potential rate cuts in the later part of the year. Interestingly, this consensus implied a departure from their more conservative stance.
Concurrently, Chicago Fed President Austan Goolsbee remained staunchly opposed to prioritizing fiscal policy that focuses on debt servicing expenses. He made his position clear, stressing the importance of staying committed to the Fed’s dual mandate. This long-standing commitment emphasizes the critical balance between price stability and achieving full employment.
Parallel to the discussions of interest rates, another sector made headlines. The commercial airline sector within the S&P 500 depicted a significant surge. The surge was led by Delta Air Lines, thanks in part to its July 10 stock increase of 12%, following the release of strong earnings data and reaffirmation of its yearly profit anticipations.
The momentum of Delta Air Lines’ robust performance transfered to other major airlines. The resultant enthusiasm permeated throughout the investment community, propelling the stocks of United Airlines, Southwest Airlines, and American Airlines to climb. Investors were now placing their bets on a potentially lucrative summer for the air-travel industry.
Beyond the traditional financial sectors, the crypto world also made news. Bitcoin, the globe’s largest cryptocurrency, managed to smash previous records, reaching an impressive peak past $118,000. This significant milestone yet again reinforced bitcoin’s position as the leading cryptocurrency player.
The surge in Bitcoin’s value mirrored the increased activities observed within the iShares Bitcoin Trust. As the world’s largest crypto-related exchange traded fund (ETF), it witnessed an influx in 12 of the most recent 13 weeks. The notable inflows demonstrated a resurgence of enthusiasm for cryptocurrency investment, particularly reflective of growing institutional interest in Bitcoin.