✅ Written by Austin DeNoce, Markets Reporter, Walk-On Holdings

✅ Edited by Casimir Stone, Creative Director Walk-On Holdings

This Week in US Markets: AI Optimism Overpowered Mixed Economic Signals to Drive Market Records

This week in U.S. markets, both the S&P 500 and Nasdaq Composite notched fresh record highs amid continued optimism around AI, briefly sending the S&P 500 above 5,500 for the very first time. 

In economic news this week, Minneapolis Fed President Neel Kashkari said it is reasonable to expect the Federal Reserve will wait until December to make its first interest rate cut as it looks for more positive data. While there weren’t any inflation prints on the docket this week, several economic reports were encouraging to those hoping for a more dovish Fed policy. May retail sales came in weaker than expected, rising just 0.1%. April’s figures were also revised lower to a decline of 0.2%, suggesting a slowdown in consumer spending. The labor market showed signs of softening as well. Initial jobless claims released on Thursday showed a slight decline from the previous week’s 2024 high, but still represented the second-highest reading of the year. 

However, to end the week, the manufacturing PMI for June showed business activity rising to a three-month high, while the services PMI rose to a more than two-year high. Existing home sales for May also showed the median home price pushing to a record high of nearly $419,300.

In company news, Tesla initiated its legal battle to reinstate CEO Elon Musk’s pay package with an open letter to the Delaware judge. Competitor Fisker made its own legal maneuver, albeit a far less promising one. The EV maker filed for bankruptcy after burning through cash to deliver its Ocean SUVs.

It was a big week of news for the tech sector. NVIDIA continued its uptrend, briefly surpassing Microsoft as the most valuable company in the world by market capitalization on Tuesday, before falling back behind Microsoft and Apple to end the week. The latter also had a big week, as its Japan-based supplier TDK announced a breakthrough that could increase battery life for Apple’s wearables. Meanwhile, Elon Musk announced that Dell and Super Micro Computer would supply xAI’s supercomputer project, and both names closed up on the week. Finally, Alphabet’s stock cemented a record-high close on Friday.

In the entertainment industry, Disney’s Pixar Animation also announced its new movie Inside Out 2 broke the record for an opening weekend of an animated film, grossing $295 million, while GameStop shares tumbled after the beleaguered company failed to provide a clear strategy at its annual shareholder meeting.

In the banking space, four of the largest American lenders — Citigroup, Goldman Sachs, Bank of America, and JPMorgan — saw their stocks fall after regulators disclosed they found weakness in their resolution plans for unwinding derivatives portfolios. Meanwhile, Capital One settled a lawsuit with Walmart, which ended its partnership with the bank after alleging it was too slow to post transactions.

Elsewhere, the state of Kansas sued Pfizer over allegedly concealing side effects of its COVID-19 vaccine. Used car retailer CarMax beat earnings estimates, but still reported a 33% annual decline in profit, partly due to macroeconomic pressures hurting sales. Darden Restaurants also reported earnings, pointing to weakness from its Olive Garden chain, but strength from Ruth’s Chris Steakhouse. Shares of education company Chegg surged after announcing a restructuring plan, which includes cutting its global headcount by nearly a quarter. Finally, shares of Truth Social-owner Trump Media fell nearly 30% on the week, after the SEC authorized its early investors to potentially dilute shareholders by exercising warrants.