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S&P 500 Takes a Breather as Tariff Fears Hit Bonds and Dollar Gains
Stock market closing data for the week of July 7th to July 11th, 2025
The S&P 500 slipped from record highs this week after President Trump announced new tariff threats, boosting the dollar to its best week since February and pushing Treasuries lower for a second straight week.
While nearly 400 stocks fell, gains in megacaps helped cushion the drop. The S&P 500 closed at 6,259.75, up just 0.01% for the week. The Nasdaq ended at 20,585.53, rising 0.46%, while the Dow Jones fell 0.96% to 44,371.51.
Analysts see upcoming earnings from major US banks as crucial for supporting the rally, as expectations remain low. Meanwhile, volatility dropped sharply, with the VIX falling below 16. Investors are now watching inflation data next week to assess further risks. Economists expect tariff-driven price pressures to build into August, delaying possible rate cuts to December.
News Summaries
Nvidia Smashes $4 Trillion Mark as AI Spending Fuels Surge
Nvidia Corp. (NVDA) has become the first company ever to achieve a $4 trillion market value after it rose 3.6 per cent this week.
This milestone highlights Nvidia’s strong rebound in 2025, with the stock up more than 20 per cent this year and over 1,000 per cent since early 2023. The company now accounts for 7.5 per cent of the S&P 500 Index, close to a record level of influence.
The main driver behind Nvidia’s rise is the growing commitment to AI spending from major technology firms such as Microsoft (MSFT), Meta (META), Amazon (AMZN), and Alphabet (GOOGL). These companies are projected to spend about $350 billion on capital investments in their next fiscal years, compared to $310 billion currently. Together, they contribute more than 40 per cent of Nvidia’s revenue. Analysts see Nvidia’s chips as critical for pushing AI technology forward, and strong earnings have confirmed this demand.
Nearly 90 per cent of analysts tracked by Bloomberg recommend buying the stock, and Nvidia still trades at about 33 times forward earnings, which many believe is justified by its growth. While Microsoft and Apple follow at around $3.7 trillion and $3.1 trillion valuations, Nvidia’s rapid rise underscores how powerful the AI boom has become for investors.
TSMC Cashes In on the AI Chip Rush, Revenue Soars 39%
Taiwan Semiconductor Manufacturing Co. (TSM) reported a 39 per cent jump in revenue for the June quarter after strong AI chip demand pushed sales higher than expected.
Revenue rose to NT$934 billion (around $32 billion), beating the average analyst estimate of NT$928 billion. This strong performance reflects renewed momentum in AI-related spending after the rise of ChatGPT and confirms TSMC’s critical role in the global tech supply chain.
TSMC’s growth was supported by large orders from Nvidia and Apple, two of its biggest customers. Chief Executive Officer C.C. Wei stated that AI chip demand continues to exceed supply and expects sales to grow by about 25 percent in US dollar terms for 2025.
The company also plans to invest $100 billion to expand manufacturing capacity in Arizona, Japan, Germany, and Taiwan to meet this growing demand.
Analysts believe strong AI demand will help offset weaker performance in mobile and consumer chip segments, although margins may stay close to 47 per cent because of currency pressures. While Nvidia’s success has fueled part of TSMC’s growth, the company remains heavily reliant on Apple and smartphone makers. Even so, this strong quarter highlights the continued strength and importance of AI-driven investments for TSMC’s future.
Revolut Eyes $65 Billion Valuation in Fresh Fundraise Push
Revolut Ltd. is in talks to raise about $1 billion through a mix of primary and secondary funding at a valuation of $65 billion, as the fintech company seeks to fuel its expansion in the United States.
The fundraising is expected to be led by Greenoaks Capital, according to people familiar with the matter, while Morgan Stanley is managing the process.
Revolut has experienced rapid growth, serving more customers than HSBC Holdings Plc last year. This helped the company boost revenue by 72 percent to $4 billion and grow its customer base to 60 million. A document shared with potential investors suggests that revenue could reach $5.9 billion in 2025 and $9.3 billion in 2026.
Founder Nik Storonsky has expressed interest in securing a US banking license and aims to reach 100 million daily active customers across 100 countries. The company expects to achieve 100 million customers by the third quarter of 2026 and targets a valuation of at least $100 billion before going public.
Existing shareholders have shown interest in selling shares at valuations above $60 billion, following last year’s oversubscribed secondary share sale that valued the firm at $45 billion. These new plans highlight Revolut’s ambition to become a global financial powerhouse ahead of a potential listing.
From the World of Crypto
Bitcoin Breaks Out: Hits $118,000, Eyes $150,000 Next
Bitcoin topped $118,000 for the first time this week, after breaking out of a nearly two-month quiet phase, marking a major move as traditional equities came under pressure from new tariffs announced by US President Donald Trump.
Bitcoin climbed as much as 4.6 per cent to just below $119,000 in early London trading, while Ether rose above $3,000 for the first time since February. ETFs focused on Bitcoin and Ether also saw their second-biggest daily inflows on Thursday.
The rally is supported by several bullish signals, including renewed ETF inflows, a US Congressional committee naming next week as “Crypto Week,” and the liquidation of over a billion dollars worth of Bitcoin short positions in just 24 hours. Some options traders are now aiming for levels as high as $150,000.
Analysts also note that Bitcoin is attracting funds as a potential haven amid trade tensions, helped by recent positive news around US regulations. Meanwhile, speculation is growing that China might ease its strict stance on crypto trading, adding further fuel to the momentum.
Key headlines of the week
TCS Warns on IT Spending Slowdown | Tata Consultancy Services shares fell up to 4.3% this week after weak revenue and a cautious outlook. The CEO stated it is too early to predict a growth recovery, while analysts believe tech spending demand is unlikely to improve soon.
Shein Files for Hong Kong IPO | Shein has confidentially filed for a Hong Kong listing. Final decisions on timing and size are pending, and approval from Chinese regulators is still required before moving ahead.
Google Gemini Adds AI Video Feature | Google is rolling out a new tool for paid Gemini users that turns photos into 8-second video clips with sound. The feature is designed with safety restrictions to prevent harmful or violent content.
Huawei Tests AI Chip Exports Abroad | Huawei is trying to export small batches of older AI chips to the Middle East and Southeast Asia and is offering remote access to more advanced systems in China. No deals have been finalized yet, but the effort aims to promote its AI capabilities globally.
