Tech giants fuel optimism, but volatility lingers

Wall Street woke up to a surge in tech stocks today, with investors cheering on the likes of Nvidia and Broadcom. But beneath the rally, caution is building as economic data and global trade tensions keep markets on edge.

Tech stocks power the rally

Nvidia stole the show again, with shares rising over 3% and pushing the Nasdaq Composite up 0.81% to 19,398.96. The S&P 500 added 0.58% to close at 5,970.37, while the Dow Jones Industrial Average rose by 214 points, or 0.51%, ending at 42,519.64. Broadcom also hit a record high, climbing 3.2% after announcing shipments of its latest AI-focused networking chips.

Angelo Zino, senior equity analyst at CFRA Research, summed up the mood: “Commentary that Trump and Xi will speak started getting discussed yesterday and chips are likely a topic on the table. Given Nvidia is essentially currently locked out of China, any discussion is prone to favour Nvidia and chips rather than hurt the story.”10

Dollar General was another standout, jumping nearly 12% after reporting better-than-expected earnings and raising its outlook for the year. As tech led the charge, the S&P 500’s technology sector rose 1.5%, reinforcing the narrative that AI and chipmakers are driving the market’s momentum.

Economic clouds and expert perspectives

Despite the upbeat numbers, signs of caution are everywhere. The Organisation for Economic Co-operation and Development (OECD) cut its US growth forecast for 2025 to 1.6% from 2.2%, blaming ongoing trade disputes and policy uncertainty. Factory orders in April dropped 3.7%, a sharper decline than economists predicted, reflecting the impact of tariffs and slowing demand.

Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, explained why investors are still hopeful: “The most important thing for investors is that the administration wasn’t going to impose those much-larger-than-expected tariffs and just leave them on, which would have almost certainly led to a recession. The fact that the US is actively engaged with so many trading partners—China, the UK, Japan, the EU, etc.—has investors feeling more optimistic that we will avoid a recession.”

But the optimism is tempered by real risks. The OECD’s downgrade and the ongoing uncertainty over US-China trade talks are keeping investors wary. As one analyst put it, “The market’s resilience is impressive, but it’s skating on thin ice. Any shock—be it economic data, trade news, or geopolitical flare-ups—could quickly change the narrative.”

Today’s US market is a tale of two mindsets: bullish bets on tech innovation and a wary eye on the global stage. Investors are enjoying the rally, but no one is ignoring the warning signs.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.

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