Wall Street extended its historic rally this week, with major benchmarks such as the S&P 500 and the tech-heavy Nasdaq 100 hitting fresh all-time highs, as strong corporate earnings, robust economic data and AI-fueled tech momentum continued to boost investor optimism.
Big banks beat earnings estimates, setting a strong tone for the season. Airlines and consumer-focused giants also impressed.
Johnson & Johnson (NYSE:JNJ) and PepsiCo Inc. (NASDAQ:PEP) reported their best trading weeks of the year, further supporting the confidence that solid consumer demand is driving margins across sectors.
Economic strength was underscored by June's retail sales data, which showed a 0.6% monthly increase — crushing economists’ forecast of 0.1% — while jobless claims dropped to 221,000, their lowest level since April.
Investors appear to be buying into a “Goldilocks” scenario, where growth is strong enough to support profits but not so strong as to trigger new inflation fears. June's inflation data came in broadly lower than expected, marking a sharp turnaround from the stagflation concerns that gripped the market in the first quarter.
Since the post-tariff lows in April, the S&P 500 has surged 27%, a rally that now ranks among the sharpest three-month advances ever.
Read also: S&P 500 Defies Odds With Rare Rally — But ‘Toppy’ Sentiment Creeps In
NVIDIA Corp. (NASDAQ:NVDA) remains the epicenter of the tech rally. Its shares have nearly doubled since April, driven by surging demand for AI chips from cloud giants like Microsoft Corp. (NASDAQ:MSFT) and Amazon.com Inc. (NASDAQ:AMZN).
Nvidia's rally has helped lift the "Magnificent Seven" — including Microsoft Corp., Apple Inc. (NASDAQ:AAPL), Amazon.com Inc., Alphabet Inc. (NASDAQ:GOOGL), Meta Platforms Inc. (NASDAQ:META) and Tesla Inc. (NASDAQ:TSLA) — to a combined $18.5 trillion market cap, surpassing China's entire nominal GDP.
Despite the economic strength, President Donald Trump has renewed his attacks on Fed Chair Jerome Powell, calling for immediate rate cuts. He even reportedly floated the idea of firing Powell before backing off the proposal.
Meanwhile, Fed Gov. Christopher Waller — a potential candidate to replace Powell next year — said he's willing to cut rates by the end of July. The Fed meeting on July 30 now carries heightened political stakes, with growing signs of internal divisions.
Read Now:
Photo: Shutterstock
