The Big Tech Seven Companies And The Stock Market Rally

The China/ US trade deal is the latest piece of good news to boost stock markets.

One stock market sector has been a notable outperformer in recent days: tech. Big tech and the Magnificent 7 have had a stunning rally in the last few days, and the overall Magnificent 7 is higher by nearly 10% so far in May. This has helped the Nasdaq 100 to return to a bull market.

Individual members of the Mag 7 have also had a momentous few weeks:

• Tesla has reclaimed its $1 trillion market capitalization.
• Nvidia is back in the $3 trillion club, along with Apple and Microsoft.
• Microsoft has the highest market capitalization of all the Magnificent 7, at $3.33 trillion.
• Microsoft’s market cap has surged by $700bn since President Trump’s first reversal on reciprocal tariffs a month ago. Nvidia’s market cap has risen by a similar amount.
• Meta’s share price has surged by $400bn since the low in April.
• On a normalized basis, Tesla’s market cap is recovering at a faster pace than its Magnificent 7 peers, it’s also worth noting that Tesla is the most volatile, so its value fell sharply before recovering strongly.
• The goods news keeps coming, as the US signs a deal with Saudi Arabia, which gives the Middle East nation access to US chips. Nvidia’s share price is higher by another 3.8% on Tuesday, which is a further sign that trade agreements are boosting the US tech sector. President Trump seems to be tying access to US chip technology to trade deals, which could see the US tech sector recover more quickly than other sectors of the US market.

Chart 1: Magnificent 7 by market cap, normalized to show how they move together.

Source: XTB and Bloomberg

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