Magnificent 7, Market Cap 'Jumps' $500 Billion in a Day...Tom Lee "S&P Will Break 8,000"

▲ US Stock Market, S&P 500, Dollar (USD)/AI Generated Image

The market capitalization of the 'Magnificent 7', referring to seven large technology stocks in the New York stock market, surged by $500 billion in a single day, driving a powerful rally. As risk asset preference exploded, centered on artificial intelligence (AI) related stocks, Wall Street analysts predicted that the index would continue its sharp rise until the end of this month.

Tom Lee of Fundstrat diagnosed in an interview with CNBC on September 22 (local time), "Last week was under extreme pressure due to the Federal Reserve's (Fed) hawkish interest rate hikes and surging oil prices and bond yields." He continued, "In recent days, oil prices have stabilized and bond yields have calmed down," adding, "With the increasingly likely possibility that the extremely hawkish Fed will soften its stance, all conditions are in place for a strong rebound."

Wall Street technical analysts focused on the recovery of leadership by technology stocks. Jay Woods, Chief Strategist at Freedom Capital Markets, explained, "The S&P 500 index broke below the 7,600 line and then found a breakthrough again." Woods added cautiously, "With the combined strength of semiconductor and software stocks, the S&P 500 index will rebound to its previous high of 7,800, but there is still not enough momentum for technology stocks alone to break through historical new highs."

The recovery of investor sentiment from its bottom was cited as a key driver for further gains. Tom Lee observed, "Until last week, most market participants were caught in extreme pessimism and reduced their stock holdings," adding, "This position imbalance could actually stimulate buying and allow the S&P 500 index to break through 8,000 before the end of this month." He diagnosed that warnings from major institutions like JP Morgan about rising oil prices created extreme fear, but as energy prices decline, funds are now pouring into risk assets.

The steep rebound of individual technology stocks also continued. AMD touched a market capitalization of $1 trillion for the first time during intraday trading. Meta Platforms (META) surged 25% this month alone, and Intel (INTC) also climbed 35% this month and 11% on the day. Tom Lee predicted, "The market had concluded that the upward cycle of large AI companies was over, but an explosive price surge has occurred," adding, "As AI stocks are still below their June highs, a 'catch-up' rally will continue."

[Key Article Summary]

-The market capitalization of seven big tech companies increased by $500 billion in a single day, leading the market rally.

-Tom Lee predicted that the S&P 500 index would break through 8,000 this month, based on stabilizing oil prices and a potential shift in the Fed's stance.

-AMD surpassed a market cap of $1 trillion, and Meta (META) and Intel (INTC) surged, increasing expectations for further gains in AI stocks.

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