After trading at all-time highs on expectations of the Federal Reserve cutting interest rates, markets need a push from the technology sector. Without a strong performance from the most heavily weighted magnificent seven stocks – including Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Tesla (TSLA) – the broader market risks falling.
The market also needs AI-related stocks to continue their rally. Chances are high that Super Computer Micro (SMCI) and Nvidia (NVDA) would hold their highs. Both stocks are on an uptrend despite a late-day slump in the Nasdaq on Tuesday.
Apple’s wild leg down is showing signs of ending. The iPhone giant is the only M7 firm without an AI offering. Rumors that Alphabet would pay Apple to set the former’s Gemini AI as the default eased worries. In addition, the market is growing increasingly confident that the DOJ’s anti-trust does not have merit.
Tesla is the second M7 stock to show signs of bottoming. The stock rallied close to its 50-day simple-day moving average. The EV leader is playing on its strength as a software firm. It will give customers a one-month driver-assist technology trial. Each customer who upgrades to the driver-assist technology Full Self-Driving (FSD) would pay $12,000. That adds $12,000 in profits for Tesla.
Once the market realizes that Tesla would stop cutting prices to match the lower input costs (from lithium batteries), the free trial on the new Tesla X, S, and Y models should boost sales.
