Markets will open this morning with the S&P 500 at 5,600, a historic all-time high. Once again, the broader market trended lower while AI favorite stocks rose. Nvidia (NVDA), Alphabet (GOOG), Microsoft (MSFT), and Apple (AAPL) continued to climb.
Worryingly, restaurant stocks like Starbucks (SBUX) fell again. The stock closed at $72.51, 0.99% above its 52-week low. SBUX stock is still expensive at a P/E of ~ 20 times. By comparison, NVDA stock trades at 80 times earnings. The difference is that Nvidia has the momentum to move higher.
Apple’s rally may confuse fundamental investors. The firm reported falling iPhone sales for several quarters. However, the stock market is a forward pricing machine. It believes that Apple Intelligence is a feature that its billions of users would want. They will need to upgrade to a Pro or Pro Max iPhone to get that AI service.
Apple’s updated payment services are another tailwind. While it will pressure PayPal (PYPL), whose business is already slowing, credit card firms are out of favor. Visa (V) and Mastercard (MA) are trending lower after Bank of America analysts downgraded both V and MA stock.
The S&P 500 may close at fresh new highs daily. Anything can happen during summertime trading. In September, the market would need weak economic news to hurt the index.
