Good morning, investors. Big banks had a strong start to earnings season on Tuesday, yet it’s Nvidia that found itself stealing the spotlight from the rest of Wall Street. It’s a familiar position for CEO Jensen Huang — and for the last three years that’s been an extremely good thing for shareholders.

Higher and higher

Nvidia just keeps winning across Washington and Wall Street. 

Nvidia stock climbed 4% Tuesday to hit a record high after the US government gave it the green light to resume selling its H20 AI chips to China.

Shares of rival chip firms AMD, Micron Technology, and Broadcom also climbed. 

On the news, Bank of America raised its price target for Nvidia to $220 from $180.

Currently, Nvidia accounts for nearly 8% of the S&P 500. That’s the highest weighting for a single stock in 45 years, according to Todd Sohn, senior ETF strategist at Strategas Securities. 

For context, industrials account for 8.7% of the index, while healthcare stands at 9.1%. 

That’s what happens when your company’s market cap nears $4.2 trillion. 

More trillions could be on the way as the Trump administration rolls back more regulations for the AI industry and tech supply chains, according to UBS’ chief investment office.

While geopolitical risks remain — tariff uncertainty and negotiations over rare earth minerals — the earnings outlook for Nvidia and its peers should be enough to sustain the momentum. 

“The resumption of some US AI chip sales in China would add to already robust global demand for AI chips, which has been growing this year on both sovereign AI deals in Europe and the Middle East and thanks to solid US large-cap tech capex,” said Ulrike Hoffmann-Burchardi, global head of equities for UBS Global Wealth Management.

Indeed, Nvidia’s share of the pie could continue to expand in the coming months. And as the big get bigger, so will their influence over the rest of the market. 

The Magnificent 7 as a group — of which Nvidia’s the largest name — comprises about one-third of the S&P 500.  

Since 2020, Big Tech has driven 46% of the S&P 500’s daily price swings over a given year.

That’s higher than the 33% seen in the previous stretch between 2014 and 2019, as DataTrek Research highlighted in a note to clients Tuesday. 

Nvidia’s continued outperformance could give it even more outsized sway, particularly to its Magnificent 7 peers that have lagged in 2025.

As is, the entire market tilts from its weight.

“When it comes to US Big Tech, the ‘Mag 7’ is now the ‘Fab 4,’” said DataTrek co-founders Nicholas Colas and Jessica Rabe, giving the nod to Nvidia, Meta, Microsoft and Broadcom. 

Notably, Big Tech’s dominance has been a boon for passive investors.

Yet one consequence of Nvidia’s unrelenting climb has been its over-weighting across broad market index funds, Strategas Securities’ Sohn told Opening Bell Daily. 

As a result, allocations to defensive stocks have fallen to the lowest levels in decades.

Nvidia stock has climbed 23.4% year-to-date so far.

Market snapshot

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Elsewhere

🏦 JPMorgan earnings came in strong. The bank’s second-quarter profits beat expectations, driven by market volatility and a resilient US economy. Investing banking fees rose by 7% while trading revenue climbed 15%. Shares still fell in the trading session. (WSJ)

📈 The 30-year Treasury yield touched 5%. The rate on the long-term US government bond moved as high as 5.023% on Tuesday, and it’s climbed for three consecutive trading days. The yield Tuesday marked the fourth highest this year. (Barron’s)

📊Annual inflation ticked up in June. The Bureau of Labor Statistics announced CPI rose 2.7% in June compared to a year ago, up from 2.4% in May, in line with consensus’ expectations. The closely-watched core inflation, however, was cooler than expected. (CNBC)

Rapid-fire

• JPMorgan’s Jamie Dimon said Fed independence remains “absolutely critical” for credibility (WSJ)

• Crypto-related bills failed to clear a key hurdle on Tuesday in Washington (CNBC)

• Investors are still coming out of one of the worst bond market runs in history (Morningstar)

• Tesla stock fell after a report that said one of the company’s top sales executives departed (Barron’s)

• Target stock fell Tuesday and its annual sales have now stagnated for four years (CNBC)

• BlackRock inflows fell to the lowest in over a year in Q2 as a large client in Asia pulled $52 billion from the asset manager (FT)

• Indonesia and the US struck a trade deal that the Indonesian government is “very happy” with (WSJ)

• Institutions ramped up crypto options trading and adoption in the first half of 2025, driving historic inflows to crypto markets (Wintermute)

• Bitcoin’s performance and finite supply puts it in a class of its own (Pomp Letter)

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Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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