US Stocks Hit New All-Time Highs
American stocks extended their recovery to set new record highs after Israel and Iran agreed to a ceasefire and on optimism that more countries will reach trade deals with the US in the coming weeks. The blue-chip S&P 500 and technology focussed Nasdaq gained 3.0% and 3.8% respectively over the week.
Remarkedly, the S&P 500 has recovered 25% from it’s low on 8 April, in the wake of President Trump’s “Liberation Day” tariff announcements, and is up 6% since the start of the year. However, due to the sharp decline of the US Dollar, the returns on US blue-chip stocks for European (-7%) and UK (-4%) remain in negative territory for the first half of the year.
The US Dollar index has declined 10.7% in the first half of 2025, its weakest start to a year since 1973, largely due to the more combative foreign policies of the White House administration which have undermined America’s trusted, safe-haven status internationally.
Shares in Nvidia, the US semiconductor manufacturing giant, gained 10% over the week, enabling it to regain its status as the world’s most valuable company with a market capitalisation of $3.8 trillion, ahead of Microsoft ($3.7 trillion) and Apple ($3.0 trillion).
Nvidia CEO Jensen Huang told the audience at the company’s annual shareholder meeting that artificial intelligence and robotics are “multitrillion-dollar growth opportunity” as companies build out infrastructure critical for AI applications. He also asserted that Nvidia’s high-end AI chips will be the technology of choice in the future for “billions of robots” and “millions of autonomous vehicles”. Nvidia has already launched a self-driving car platform which is being used by Mercedes-Benz in the development of new cars.
Nike was another standout performer during the week. Shares in the sportswear manufacturer jumped 15% on Friday, their biggest daily jump in four years, after it reported better-than-feared quarterly earnings. Although chief executive Elliott Hill, who returned to the company from retirement last year, warned that tariffs costs will be around $1 billion, investors welcomed early signs that its turnaround strategy is starting to pay off.
Revenues during the quarter fell 12% to $11.1 billion, ahead of consensus forecasts of $10.7 billion, and sales of running products were up by high single digits, an area where competition from emerging rivals such as Hoka and On has been fierce. Under Hill’s turnaround plan, Nike has resumed selling products on Amazon for the first time since 2019 and has prioritised marketing to female shoppers. Nike (-30%) was the second-worst performer in the Dow Jones Industrial Average Index last year.
Closer to home, shares in BP fell more than 5% on the week after Shell said it had “no intention” of making a bid for its rival, ending months of speculation of a tie-up between the UK’s two largest oil companies to create a global energy giant. Under stock exchange rules, Shell is prohibited from making an offer for BP for at least six months.
Earlier this year BP announced a shift away from renewable energy to refocus on oil and gas activities and is seeking to sell $20 billion of assets by 2027 to shore up its balance sheet.
Oil majors were also impacted by lower oil prices last week in the wake of the Israel-Iran ceasefire. Brent crude has retreated more than $10 from its recent peak to $67 a barrel as the threat of Iran blockading the Strait of Hormuz has faded. Around 20% of global oil and gas flows through the narrow shipping lane.
Safe-haven assets, including gold and government bonds, also saw outflows as the tensions in the Middle East eased.
In the week ahead, the focus in the economic calendar will be on Thursday’s US nonfarm payrolls report. The monthly report, which will be released a day early due to the Independence Day holiday, is a key barometer of the health of the US economy and analysts expect it will show that around 100,000 jobs were added in June. Any reading below that will put more pressure on the Federal Reserve to cut interest rates later this month.
(Cover Image Source: Chris Li)