US stock markets hit a wall after an extraordinary run-up adding $15 trillion in value, reaching record levels. This rally was driven largely by expectations surrounding the Federal Reserve’s anticipated rapid interest rate cuts, which have pushed major indexes like the S&P 500, Nasdaq 100, Dow Jones Industrial Average and Russell 2000 to new highs.

The Russell 2000 outperformed, rising 3% on the week and on pace for its seventh consecutive weekly gain—its longest rally since late 2020.

President Trump indicated progress in US-China trade negotiations, boosting investor confidence in multinational companies and exporters. While details are still emerging, markets interpreted the signals as positive, raising hopes for a resolution that could ease tariffs and reduce global supply chain uncertainty.

A potential trade breakthrough could support corporate earnings and long-term investor sentiment. Companies exposed to international trade, especially tech and manufacturing, may see improved profitability if a deal reduces barriers or regulatory risks.

Bridgewater founder Ray Dalio highlighted risks to the US monetary system amid rising debt, recommending 10% portfolio allocations in gold and other non-fiat assets. Meanwhile, President Trump is considering a $550 billion fund to boost domestic manufacturing, prioritizing sectors like semiconductors and critical minerals.

Dow, S&P 500, Nasdaq rise as tech and small caps lead

The Dow Jones Industrial Average traded 98 points higher, or 0.2%, while the S&P 500 also gained 0.2%. The Nasdaq Composite, buoyed by strong technology sector gains, advanced 0.3%. Small-cap stocks shone, with the Russell 2000 rising 0.1% to hit a record closing high, extending a seven-week winning streak and underscoring the resilience of domestic-focused companies.

Apple led tech gains, jumping 1.4% on the global rollout of its latest iPhone.

Tesla shares rose 2%, reflecting investor optimism in high-growth sectors.

This broad-based strength suggests that the market rally is not solely driven by Big Tech, but also supported by earnings momentum across multiple sectors.

TikTok deal and Oracle’s role

The TikTok agreement involves a consortium of investors—including Oracle (ORCL), Silver Lake, and Andreessen Horowitz—taking an 80% stake in the company. Oracle would manage US user data on its Texas servers, keeping TikTok operational in the US despite potential regulatory restrictions.

Oracle shares rose 1.88% on Friday, marking a 28% gain for the month, as investors anticipate increased cloud revenue from TikTok’s data management. Morningstar estimates that TikTok accounts for roughly 5% of Oracle’s Cloud Infrastructure business, highlighting the deal’s significance.

The transaction, if completed, could also reinforce Oracle’s strategic positioning in the US cloud computing market while giving investors confidence in the company’s growth trajectory amid its broader AI partnerships, including OpenAI.

Federal Reserve rate cut supports equity markets

Earlier in the week, the Federal Reserve lowered its benchmark interest rate by 0.25%, marking its first cut since December. Markets reacted to Fed Chair Jerome Powell’s description of the move as a “risk management” adjustment, highlighting caution amid economic uncertainty.

Lower borrowing costs are likely to stimulate business investment and consumer spending. This move complements strong corporate earnings, providing a dual boost for stocks, particularly in technology and capital-intensive sectors.

Russell 2000 breaks historic streak

Thursday’s close for the Russell 2000 ended a 967-trading day streak without a new closing high, the second-longest such period on record. Small-cap stocks often serve as a gauge of domestic economic strength, and the index’s performance suggests renewed investor confidence in the US economy.

The Russell 2000’s rise has been broad-based, highlighting that gains are not limited to mega-cap tech but extend across a diverse set of domestic companies.

Stock movers

• UPS downgraded by BMO Capital Markets: Persistent macro challenges, including the elimination of the de minimis trade exemption, weighed on United Parcel Service. BMO cut the stock to “market perform,” citing cost reductions lagging revenue declines. UPS shares are down 32% year-to-date.
• Lennar struggles despite incentives: Homebuilder Lennar saw its stock drop over 3% after earnings fell 46%, reflecting weak housing demand and margin pressures. Even with mortgage buydowns and other incentives, affordability challenges remain a major drag.

NANO Nuclear Energy (NNE) surged nearly 15% after announcing a $6.2 million sale of its ODIN microreactor design to Cambridge Atom Works in the UK. This move allows NANO to focus on its gas-cooled reactor technology, potentially improving long-term growth prospects.

Nvidia’s $5 billion investment in Intel on Thursday added optimism for the semiconductor sector, as both companies plan to co-develop chips for PCs and data centers, highlighting a broader collaboration trend in the industry.

Gold remains a safe haven

Gold futures rose 0.3% on Friday, extending a five-week winning streak. The metal has benefited from Fed rate cuts and expectations of a weaker dollar, providing a hedge against global debt pressures.

What investors should watch next

While Friday’s gains were modest, several factors will shape market direction in the near term:

1. Final details of the TikTok deal: Investors are monitoring how Oracle and its partners manage user data and whether regulators approve the transaction fully.
2. US-China trade talks: Any breakthroughs could provide a further tailwind for equities, particularly multinational and export-driven companies.
3. Macro-economic data: Inflation, consumer spending, and interest rate policy remain key indicators for Wall Street sentiment.

Analysts suggest that continued progress in these areas could keep the US market on track for further record highs, but caution remains over geopolitical and regulatory risks.