The market remains confident in a positive future. It hears only what it wants to hear. Negative news is ignored, allowing the S&P 500 to set new records. It doesn't matter that Vietnam will impose a 20% import tariff on the U.S. and a 40% tariff if goods from other countries pass through its territory. What matters is that Donald Trump made a deal with Hanoi. It doesn't matter that Tesla's global car sales dropped by 13.5% in the second quarter. The company's stock jumped 5% due to increased investment in software. And so it goes across the board.

If, in 2023–2024, the U.S. stock market was dominated by the Magnificent Seven, then in 2025, the situation has changed. Apple, Alphabet, and Tesla are pulling the S&P 500 down. In contrast, Microsoft, Nvidia, and Meta are pushing the broad stock index to new heights, thanks to artificial intelligence technologies.

Performance of the Magnificent Seven Stocks

According to BlackRock, it's premature to write off American exceptionalism. Yes, U.S.-issued stocks are currently underperforming their European counterparts. The S&P 500 has risen 5% since the beginning of the year, while the EuroStoxx 600 has climbed 7%, and in dollar terms, by as much as 22%. However, due to the active implementation of artificial intelligence technologies, the financial performance of U.S. companies will surpass that of their competitors.

BlackRock expects U.S. corporate earnings to rise by 6% in the second quarter, while European companies will see only a 2% increase. In July and September, the gap is expected to widen further. European companies are export-oriented. Meanwhile, the more than 10% weakening of the U.S. dollar in the first half of the year and the record-high trade-weighted euro exchange rate will erode their revenues.

Performance of U.S. and European Stock Indices

The Magnificent Seven are gradually recovering. If capital outflows from the United States to Europe cease, the S&P 500 will have an opportunity to set a few more records. In a climate where retail investors are buying every dip, professionals see no reason to go against the bullish momentum, and the markets hear only what they want to hear.

They were not fazed at all by the first drop in ADP private-sector employment since 2023, recorded in June. The May figure was also revised downward. All of this signals a cooling labor market and heightens the risk of a recession. Still, investors are ignoring the negative data. They believe that the economic slowdown will force the Federal Reserve to cut the federal funds rate—possibly even in July.

The central bank has repeatedly stated that a single report is not enough to make policy decisions. However, unprecedented pressure from Trump on Jerome Powell could change everything.

Technically, on the daily S&P 500 chart, the bulls stormed the key pivot level of 6200 and pushed prices higher. If buyers manage to hold above this key support, the path to 6325 and 6450 will be open. Long positions should be maintained from the 6051 level.