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AI back in driver's seat
U.S. President Donald Trump's "Liberation Day" announcement crushed Wall Street in April. Fast-forward more than two months, and the benchmark S&P 500 index (SP500) is back within striking distance of its record high. The rebound has been astonishing, and it has been driven significantly by the return of the artificial intelligence (AI) trade.
The AI trade exploded in 2023, with chipmakers and other related companies seeing exponential gains on bets of wide-scale adoption of the technology. Sentiment then took a hit this year, sparked by a rescaling of AI expectations, concerns over high valuations, and Trump's tariff shock. However, with several positive trade developments since April and a fairly solid tech earnings season, investors have flocked back to the trade.
AI darlings: Nvidia (NVDA) on Wednesday scaled an all-time high and reclaimed its position as the world's largest company by market capitalization. The advance came amid Loop Capital raising its price target on the chipmaker and predicting a "Golden Wave" of generative AI adoption. Meanwhile, memory chipmaker Micron Technology (MU) blew past expectations with its quarterly results and guidance, and Palantir Technologies (PLTR) hit a record high.
QQQ scales peak: The world's fifth-largest exchange-traded fund - the Invesco QQQ ETF (QQQ) - has soared +34.5% since its intraday low in April in the aftermath of Trump's tariffs announcement. The ETF tracks the tech-focused Nasdaq-100 (NDX), which itself has surged +34.4% over the same period. Marko Kolanovic, JPMorgan Chase's former chief global markets strategist, had some words of caution, calling the NDX rally "not normal or healthy" regardless of one's market view. Speaking of ETFs, the $3.58B Global X Artificial Intelligence & Technology ETF (AIQ) has jumped +40.8% from its April low.
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What else is happening...
Jane Street co-founder said to have been ‘duped’ into funding coup
AI beats authors in court
Hims & Hers (HIMS) CEO says compounding Wegovy will continue
Micron (MU) pops as guidance blows past expectations on AI strength
Fannie (OTCQB:FNMA), Freddie (OTCQB:FMCC) may include crypto in mortgage risk assessment
Bezos looks to capitalize on Musk-Trump rift?
Trump CDC director nominee sees no link between vaccines and autism
Apple (AAPL) in talks with Formula One to put camera lenses on cars
Meta (META) recruits three OpenAI researchers for superintelligence push
Boeing (BA) said to hire former Northrop (NOC) exec to run Air Force One program
Today's Markets
In Asia, Japan +1.7%. Hong Kong -0.6%. China -0.2%. India +1.2%.
In Europe, at midday, London +0.4%. Paris +0.1%, Frankfurt +0.6%.
Futures at 6:30, Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.4% to $65.15. Gold +0.2% to $3,339.67. Bitcoin +0.3% to $107,392.
Ten-year Treasury Yield -2 bps to 4.27%.
On The Calendar
Companies reporting today include Walgreens Boots Alliance (WBA) and Nike (NKE).
See the full earnings calendar on Seeking Alpha, as well as today's economic calendar.
