Mega-Cap Tech Rally Drives S&P 500 and Nasdaq to Record Highs Amid Economic Uncertainty

The S&P 500 surged 2.4% last week, adding $850 billion in market value, while the Nasdaq 100 climbed 3.7% to a new record. Mega-cap tech stocks led the charge—Apple alone contributed $400 billion after announcing an additional $100 billion in U.S. investment, a strategic MOVE that may shield its India-manufactured iPhones from tariffs.

Investors continue to treat these giants as both defensive plays and growth engines in the current bull market. The rally defied recent jitters sparked by weak July payroll data and downward revisions to spring job growth, which had raised concerns about consumer resilience and left the Federal Reserve in a policy bind.

Sentiment shifted as traders priced in higher odds of a September rate cut, bolstered by dovish Fed commentary. Barclays strategist Venu Krishna noted the market had grown "a bit complacent" about economic risks by early August. Earnings and macro conditions must now jointly support equities—a delicate balance complicated by tariff disputes and August's historical volatility.

Beneath the index-level gains, significant casualties emerged. Twelve S&P 500 constituents dropped over 10% last week, with Eli Lilly, ON Semiconductor, and Trade Desk plunging 18%, 16%, and 37% respectively on disappointing earnings or guidance.