This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
Alphabet, Amazon, Apple, and other companies comprise the “Magnificent Seven” group of equities.
Microsoft, Nvidia, Tesla, and Meta Platforms were the main drivers of the S&P 500’s impressive 23.31% increase in 2024.
Additionally, they have been among the equities most severely impacted by the tariffs imposed by US President Donald Trump. The companies that suffered the most were Apple and Nvidia, which are highly dependent on international supply chains and export markets. In contrast, the shares of Microsoft and Meta, which get a larger portion of their income from digital services like enterprise software or ad revenues, actually increased this year.
Nvidia became the third member of the Magnificent Seven to trade in the green this year, joining Microsoft and Meta on Wednesday. As the name implies, the chipmaker does not deal in intangible goods that might evade trade restrictions, so this is a big move.
Nvidia’s rebound indicates that Trump’s trade policies, including tariff accords and wide-ranging bilateral relations like the one he established with Saudi Arabia during his state visit, are improving the economic climate. However, it also highlights how erratic the market can be this year, since the catalyst for 2024’s ferocious run may falter in the weeks leading up to Trump’s “Liberation Day.”
What To Note Today
S&P 500 Posts Modest Gains as Tech Lifts Nasdaq
The S&P 500 extended its winning streak to three days with a 0.1% gain, while the Nasdaq rose 0.72%, driven by AMD’s 4.7% rally after a $6 billion buyback and Nvidia’s rebound. The Dow fell 0.21%. The Stoxx 600 slipped 0.24% in Europe, ending a four-day run. Burberry surged 17% on cost-cutting plans.
Nvidia Turns Positive for 2025 After Major Saudi Deal
Nvidia shares rose over 4% after striking a deal to supply 18,000 AI chips to Saudi Arabia. The rally pushed Nvidia into positive territory for the year, joining a few “Magnificent 7” stocks recovering amid a mixed tech sector.
Boeing Lands Record Jet Order with Qatar Airways
Boeing and Qatar Airways signed a landmark deal for up to 210 aircraft during Trump’s state visit, marking the largest order in the airline’s history. The agreement provides a much-needed boost for Boeing, which hasn’t seen profits since 2018.
Trump Praises Saudi Prince at Investment Forum
At the U.S.-Saudi Investment Forum, Trump expressed warm admiration for Saudi Crown Prince Mohammed bin Salman, saying, “I like you too much,” in front of business leaders including Elon Musk, Jensen Huang, and Larry Fink. During the visit, Trump also met with Syria’s Ahmed al-Sharaa.
Klarna Cuts Workforce by 40% as AI Takes Over
Klarna’s CEO revealed the company has reduced staff from 5,000 to around 3,000, attributing the 40% cut to AI-driven efficiencies. AI now handles tasks equivalent to 700 agents. The company also paused its IPO following Trump’s tariff announcement.
Market Pullback Could Revisit April Lows: Steve Cohen
Billionaire investor Steve Cohen warned that stocks might retest their April lows and placed the odds of a recession at 45%. However, he emphasized that a downturn wouldn’t necessarily trigger a financial crisis.
New U.S. AI Chip Rules Complicate Nvidia’s Global Expansion
While Nvidia secures a major AI chip deal with Saudi Arabia, new U.S. restrictions on AI chip exports to China add fresh hurdles. The Trump administration’s updated policy aims to curb unauthorized usage and restrict supply chain loopholes, just as a U.S.-China tariff truce begins to take effect.
