Wall Street’s record run: Is there still more room at the top?

2 minutes read

22 July 2025

Wall Street’s record run: Is there still more room at the top?

It has been a summer of records in New York. The S&P 500 and Nasdaq have just closed at fresh all-time highs, their charges led, once again, by the usual suspects from Big Tech. But behind the headlines and the tickers surging on screens across Wall Street, the real story of this market is one of anticipation, nerves, and a pinch of good, old-fashioned Fear Of Missing Out.

There’s a sense on the trading floors that while everyone is still dancing, some are edging closer to the exit—at least with one eye on the Fed and another on the political winds blowing from the White House. But let’s start where the energy is: in the earnings season and the heat surrounding Alphabet and Tesla.

A week of cheers and caution in tech

This week belonged to the so-called ‘Magnificent Seven’—with Alphabet and Tesla at the centre. Investors were holding their breath for updates, given tech’s responsibility for much of the market’s upward momentum. Alphabet’s parent company, Google, posted robust numbers, pushing revenue to $84.7 billion for the quarter—up 14% on last year—thanks to steady ad sales and a powerful leap in cloud computing. “Business is going great for the company,” confirmed a market analyst, highlighting the ongoing AI investments and their effect on performance.

Tesla, meanwhile, delivered more of a mixed bag. Revenue nudged higher by 2% to $25.5 billion, but profits slipped 45%, hitting their lowest margin in five years, as increased competition and price cuts squeezed the carmaker. The company’s own commentary sounded cautious, warning that, “the 2024 vehicle volume growth rate may be notably lower than the growth rate achieved in 2023.” Elon Musk has pivoted the conversation toward innovation and continued investment in AI, but analysts are watching closely. As John Haslett of Grin and Bear It commented, “Margins are under pressure…Elon’s goal is pushing Tesla to dominate autonomous driving and overcome its year-to-date negative performance”. Bar chart showing stock price changes post-earnings for Alphabet, Tesla, and Verizon

Wall Street’s balancing act: Optimism, risk, and the unknown

Stocks, especially the S&P 500 and Nasdaq, are soaring despite undertones of anxiety. Some strategists are warning valuations may be running hot compared to economic fundamentals, reminding investors that high hopes need solid results to back them up. For now, corporate earnings are a tailwind, with more than 70% of firms beating profit estimates in this early reporting batch. There remains a sense, however, that markets are living on hope as much as on results.

“Robust corporate earnings and expectations for declining interest rates are likely to drive markets higher,” says John Lynch, chief investment strategist at Comerica Wealth Management, who points to the combination of a solid consumer, easing price pressures, and a patient Federal Reserve as key fuel for the bull run.

Yet, not all risk can be swept away by rosy numbers and record closes. Political uncertainty over US-EU tariffs and upcoming Fed commentary keep traders on guard. A reminder from one prominent analyst at FXStreet: “There are growing signs that the rally could face headwinds, and investors may want to prepare for potential volatility ahead”.

As the story of the US stock market unfolds this summer, one thing is clear. For every investor riding this wave to new heights, another is watching the shore and thinking: how much higher can we go before the tide shifts?

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