Magnificent Seven Drive Wall Street's Rally, Nvidia Notches Best Month In A Year: This Week In Markets

A gauge tracking the so-called “magnificent seven” — which includes Apple Inc. AAPL, Microsoft Corp. MSFT, Nvidia Corp. NVDA, Amazon.com Inc. AMZN. Alphabet Inc. GOOGL, Meta Platforms Inc. META and Tesla Inc. TSLA — surged 15% in May.

The rally coincided with an especially solid month for U.S. equities. The S&P 500, tracked by the SPDR S&P 500 ETF Trust SPY, surged more than 6% for the month. That’s its strongest month since November 2023.

But beneath the surface is Apple's rare underperformance.

Six out of the magnificent seven tech giants logged monthly gains. The iPhone maker, however, lagged its peers and delivered its weakest relative performance against the S&P 500 Index since 2018.

In contrast, Nvidia posted a staggering 24% monthly jump — its best performance since May 2024 — after delivering better-than-expected quarterly earnings.

Despite facing export restrictions on its chips to China, Nvidia's revenue resilience confirmed that artificial intelligence demand remains healthy. Overall revenue reached $44.1 billion, up 69% from a year ago.

"Countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and Nvidia stands at the center of this profound transformation," CEO Jensen Huang said.

While Wall Street paints a positive picture, Main Street tells a different story, as pessimism among U.S. consumers runs high.

The U.S. economy contracted by 0.2% in the first quarter, a slight upward revision from the initial -0.3% estimate, yet a stark reversal from the 2.4% growth rate seen in late 2024. Inflation, as measured by the Personal Consumption Expenditures price index, cooled to 2.1% in April — its lowest pace in six months — from 2.3% in March.

But the public doesn’t seem to trust the disinflation narrative.

According to the University of Michigan's May survey, Americans expect inflation to run at 6.6% over the next year, the highest level since 1981. That figure reflects the widest gap ever recorded between perceived and actual inflation. Meanwhile, overall sentiment remains near three-year lows.

In a notable development on the trade front, the U.S. Court of International Trade struck down significant portions of President Donald Trump's newly proposed tariff actions.

While the move sparked brief investor optimism, analysts caution the Trump administration retains various legal avenues to reintroduce similar trade barriers.

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