The US stock market has set multiple records in the past week, with the S&P 500 reaching an all-time high of 6,187.68 and the Nasdaq Composite hitting a new record of 20,311.51. This surge is attributed to several key themes driving the market.
Firstly, the generative artificial intelligence (AI) trade has seen a significant rebound. Despite initial concerns over tariffs and semiconductor production, investors have brushed off these uncertainties and instead focused on the growth prospects of AI behemoths like Nvidia. The company’s recent record-breaking quarterly earnings report, combined with its massive deal with startup Humain, has boosted demand for its AI chips.
As a result, stocks like Broadcom, which relies heavily on AI chip sales, have also seen significant gains. Additionally, hyperscalers like Microsoft, benefiting from its cloud computing business, Azure, are also performing well.
Secondly, investors are turning to defense stocks as geopolitical tensions escalate. Cybersecurity names like CrowdStrike have hit new records, and their peer Palo Alto Networks is only 3.5% off its all-time high.
Lastly, the US economy has shown more resilience than expected, with Federal Reserve Chair Jerome Powell describing it as “still solid.” This has led to a pick-up in dealmaking, including initial public offerings, which will benefit companies like Goldman Sachs and Capital One.
These themes highlight the complexities of the current market landscape. As investors continue to navigate these factors, they must be aware of the potential risks and opportunities ahead.
Source: https://www.cnbc.com/2025/06/27/3-forces-driving-a-record-week-for-stocks-as-7-portfolio-names-hit-highs.html