US Stock Market Trend (July 7): Dow Jones Breaks 53,000 Points for the First Time, Oil Market Sees Largest Wave of Price Cuts in 26 Years
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US Stock Market Trend (July 7): Dow Jones Breaks 53,000 Points for the First Time, Oil Market Sees Largest Wave of Price Cuts in 26 Years
Once the minutes unexpectedly lean hawkish, semiconductors and crude oil will be the first two sectors to break down.
Navigating Web3 tides with focused insightsBy: TechFlow Research
After the long weekend, funds flowed back into the stock market all at once, with the three major indices closing higher collectively, hitting the pause button on the downward trend following last week's non-farm payrolls. Saudi Arabia slashed the August official selling price for crude oil to the sharpest level in nearly 26 years, causing oil prices to fall directly below pre-conflict levels. A statement from Trump supporting cryptocurrency allowed Bitcoin to complete a V-shaped reversal during the afternoon session.
Market Performance
The S&P 500 closed up 0.72% at 7537.43 points. The Dow Jones rose 0.29% to 53055.91 points, with the closing price surpassing the historical high left on the day of the non-farm payrolls (July 2). The Nasdaq Composite rose 1.12% to 26121.16 points, and the Nasdaq 100 rose 1.26% to 29697.873 points, with the two technology indices leading the charge. The Russell 2000 rose slightly by 0.45% to 3009.541 points. The VIX closed down 1.58% at 15.56.
Among the Magnificent Seven, Tesla stood out alone, rising 6.69%, Meta rose 2.98%, Google Class A rose 1.82%, Apple rose 1.31%, Amazon rose 0.61%, Nvidia rose 0.37%, and Microsoft was the only one to close lower, falling 0.96%. Chip stocks strengthened across the board, with the Philadelphia Semiconductor Index rising 2.17% to 12900.142 points, TSMC ADR rising 4.07%, AMD rising 6.61%, and Western Digital rising over 7%. The support behind this was Nvidia confirming externally that the server roadmap had not changed, the chip foundry agreement between Broadcom and Apple being renewed until 2031, and Hon Hai's second-quarter revenue rising nearly 40% year-on-year, better than market expectations.
Cryptocurrencies outshined gold, with Bitcoin closing at $63,571, up about 1.4%, and Ethereum at $1,787, up 0.7%; gold instead fell to $4,162, down about 0.4%. Bitcoin once plunged deeply to near $61,000 during the session, caused by Strategy Inc. selling approximately $216 million in holdings, the second time this year such a large-scale reduction occurred; what truly turned the price around was Trump's shout of strong support for cryptocurrency at the White House that day, after which Bitcoin pulled back to close at the day's high. Crude oil was the weakest link overall, with Brent falling to $71.75, hitting a new low since the end of February this year. US Treasuries and exchange rates fluctuated little, with the 10-year yield slightly decreasing by 2 basis points to 4.47%, and USD/JPY rising to 162.03.
Macro and Outlook
The magnitude of Saudi Arabia's price cut this time is the largest in nearly 26 years; the last time it was willing to sell oil at a discount was during the price war in 2020. The reason behind this is more about spot inventory being too high, with the intention to grab market share being relatively secondary; what the market worries about is whether other Gulf oil-producing countries will be forced to follow suit. OPEC+ simultaneously raised the August production target by another 188,000 barrels/day, and there are no signs of relief in supply-side pressure in the short term.
The US June ISM Services Index released on Monday showed that the expansion pace slowed somewhat, but hiring is recovering, and pressure on the cost side has also eased. The report also mentioned that many industries plan to raise prices, so the string of inflation has not truly loosened.
Fed Governor Waller's statement at a meeting in Rome gave a signal that he is still willing to use the tool of forward guidance, but regarding current risks, he is more concerned about the inflation side. There is a consensus in the market regarding the first FOMC minutes led by Wash, that the wording will likely be more restrained than in the past; even so, the pricing given by traders for the 2026 rate hike amplitude remains around 30 basis points, a notch higher than the level before Wash took office.
Two voices have emerged on the semiconductor front. Morgan Stanley's Mike Wilson looks at the current trend alongside the trend before the silver crash back then, bringing the discussion of bubble risk back to the table; BlackRock is concerned with whether AI can sustain profit margins at this abnormally high level for the long term, with valuation itself being a secondary issue. UBS's focus is more practical; it focuses on two things this week: whether the volatility of tech stocks can truly stabilize, and whether the capital expenditure of cloud computing giants will be forced to contract.
The roadshow for SK Hynix's US listing officially launched on Monday, targeting financing of 43 trillion Korean Won; management has already received indicative subscriptions from large investors, with a scale up to $7 billion.
TechFlow Perspective
This rebound looks more like a one-time release of sentiment accumulated during the long weekend, with no new variables appearing in the fundamentals themselves. Funds moved back from the bond market to the stock market, with cyclical stocks outperforming defensive stocks; what truly drove prices over the two days was the return of liquidity. Risk points are similarly concentrated: semiconductors are being compared to the trend before the silver crash, and Saudi Arabia's largest price cut in nearly 26 years has brought concerns of oversupply back to the table; these two lines could interrupt the rebound momentum at any time. The real watershed is on Thursday; if the wording of the first FOMC minutes led by Wash is more restrained than market expectations, this rebound will likely hold until the start of earnings season; once the minutes unexpectedly lean hawkish, semiconductors and crude oil will be the two lines that break first.
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