Despite the downturn in NVIDIA's stock price, the volatility in the Bitcoin market, and even the political uncertainty caused by Biden's debate debacle, the S&amp;P 500 index continues to rise.
This week, led by tech giants, the S&amp;P 500 index achieved a 2% weekly gain, marking its best performance since April. Star tech stocks, including Google, Apple, Microsoft, and Meta, all hit historic highs this week, except for NVIDIA.
Due to heavyweight economic data such as non-farm payrolls supporting rate cut expectations, market sentiment has significantly improved. Many believe that the U.S. economy is still in an expansion phase, enough to avoid a recession, and it is almost certain that the Fed will cut rates later this year.
&#34;The Fed remains the dominant factor, and the market believes that a rate cut will eventually happen,&#34; said Mark Freeman, Chief Investment Officer of Socorro Asset Management. &#34;As for political risks, regardless of who wins the election, there will be no major changes in fiscal policy.&#34;
<h2>Short analysts lose their jobs, some institutions even give up target prices</h2>
Despite facing multiple uncertainties, the U.S. stock market continues to maintain a strong upward trend, not only dampening the morale of short sellers but also significantly increasing the difficulty for analysts to judge the market.
Speaking of this, we have to mention the resignation of Marko Kolanovic, Chief Market Strategist at JP Morgan, known for his persistent bearish views on U.S. stocks, which has completely misjudged the market direction over the past two years.
Kolanovic, who famously remained bearish on U.S. stocks, completely misjudged the market direction:
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In January 2022, when U.S. stocks hit a high, he strongly advised investors to significantly increase their holdings in U.S. stocks. As a result, the S&amp;P 500 fell from January to October, accumulating a nearly 20% decline.
Kolanovic turned bearish on U.S. stocks at the end of September 2022 and advised clients to reduce their U.S. stock positions. As a result, the S&amp;P 500 started rising from the lowest point in October and has been rising all the way to now, with a cumulative increase of over 50%.
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This series of operations can be described as a textbook &#34;contrary indicator,&#34; which also led to Kolanovic losing his job at JP Morgan.
Moreover, some institutions have even given up providing target prices for the S&amp;P 500 index.
Researchers at Piper Sandler &amp; Co. stated that due to the index being overly concentrated in a few stocks, traditional forecasting methods have lost their meaning.
<h2>Mag 7 getting more expensive, causing the overall market to become more expensive</h2>
&#34;This year, the performance of U.S. stocks has shown a clear dichotomy: the 'Magnificent Seven' stocks continue to rise, while other stocks remain relatively flat,&#34; said Jeff Muhlenkamp, whose eponymous fund has outperformed 97% of peers over the past three years
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Given the high valuations of these market-leading stocks, it is difficult to believe that this trend can continue. However, as of now, this trend is indeed continuing.
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Wall Street News previously mentioned that in the first half of the year, nearly 60% of the gains in the U.S. stock market were contributed by just five tech giants - Nvidia, Microsoft, Amazon, Meta, and Apple, with Nvidia alone contributing as much as 31% of the gains. In the second quarter, Nvidia, Apple, and Microsoft contributed over 90% of the market gains.
Backed by artificial intelligence, these tech giants have provided a strong growth narrative, attracting investors to continuously enter the market. Nvidia's stock price repeatedly hitting new highs and claiming the top spot in global market value vividly illustrates the concept of &#34;the more expensive, the more loved.&#34;
However, a stock market concentrated in a few stocks is not a positive signal.
The S&amp;P 500 Index, trading at a P/E ratio of 26 times, is valued higher than any election year since at least 1990.
Of course, it is not possible to predict an immediate market decline solely based on the current high valuations, but this high valuation level may indeed indicate that the market returns in the future period (especially after the election) may be lower than in the past.
Dan Suzuki, Deputy Chief Investment Officer at Richard Bernstein Advisors, said:
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The high valuations of U.S. mega-cap tech stocks today suggest that their performance over the next decade may be very poor, as they occupy an absolutely dominant share, and the overall market returns of the U.S. stock market may also be quite flat.
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The significant drop in the Bitcoin market is another notable event this week.
Despite Trump's noticeably softened stance on cryptocurrencies, which should have been positive for cryptocurrencies, Bitcoin still suffered a heavy blow.
This once again demonstrates the increasing uncertainty of the impact of macro politics on the market

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Short-selling analysts have repeatedly misjudged the market and lost their jobs. Some institutions have even abandoned the traditional practice of setting target prices for the overall market. The increasing cost of Mag 7 has pushed the S&P 500 price-earnings ratio to 26 times, higher than any election year since at least 1990

- Despite setbacks like the decline in NVIDIA stock prices, Bitcoin market volatility, and political uncertainties post-Biden's debate loss, the S&P 500 index continues its upward trend.
- Led by tech giants, the S&P 500 saw a 2% weekly increase, its best performance since April, with star tech stocks like Google, Apple, Microsoft, and Meta hitting record highs.
- Market sentiment improved due to key economic data supporting rate cut expectations, with belief in the US economy's expansion and imminent Fed rate cuts, overshadowing political risks.

NVIDIA fell, Bitcoin crashed, but US stocks still "forge ahead under pressure"