Magnificent 7's Reign Rolls On, Powell Puts Chill On Rate-Cut Hopes: This Week In Markets

Wall Street's love affair with mega-cap tech shows no signs of cooling. The S&P 500 just wrapped up its sixth straight month of gains, climbing more than 40% since the post-tariff lows in April. But once again, it's the so-called Magnificent Seven doing the heavy lifting.

Nvidia Corp. (NASDAQ:NVDA), Microsoft Corp. (NYSE:MSFT), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), Meta Platforms Inc. (NASDAQ:META), and Tesla Inc. (NASDAQ:TSLA) now boast a combined market value north of $22 trillion. Nvidia alone has crossed an unprecedented $5 trillion valuation, cementing its role as the world's most valuable company.

The chipmaker's CEO Jensen Huang stunned investors at Washington's GTC event on Tuesday by unveiling $500 billion in projected AI datacenter revenue over the next two years.

All five tech titans that reported earnings this week—Microsoft, Alphabet, Amazon, Meta, and Apple—beat analyst expectations. Yet the market's response was mixed. Amazon and Alphabet surged sharply, Apple and Microsoft were little moved, while Meta plunged 10% after announcing massive AI-related capital spending.

The Cupertino-based tech giant continues to wrestle with weaker Chinese demand but sounded upbeat on iPhone 17 sales heading into the holiday season.

Meanwhile, Federal Reserve Chair Jerome Powell threw a splash of cold water on hopes for another rate cut in December.

Although the Fed delivered a widely expected 25-basis-point reduction on Wednesday, Powell stressed that another cut in December is "far from a foregone conclusion."

Divisions within the Fed are growing, he admitted, and visibility has worsened due to the ongoing government shutdown, which is delaying key data.

"If you are driving in the fog, you slow down," Powell said.

Beyond the trading screens, signs of labor market strain are intensifying. Amazon recently cut 14,000 jobs, prompting some to highlight the rising impact of AI.

General Motors Co. (NYSE:GM) is temporarily laying off about 5,500 workers across three plants, including Detroit's Factory Zero. GM plans to bring back roughly 2,200 employees in January but will furlough 1,200 indefinitely as it reassesses electric-vehicle output following President Donald Trump's rollback of key EV tax credits.

With no official labor data due next week, investors will closely watch private-sector surveys like ADP's National Employment Report for clues on hiring trends and what they might mean for future Fed policy.

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Image created using artificial intelligence via Midjourney.