Happy Friday, investors. Wholesale inflation data came in hotter than expected for July and stocks were flat on the day. It’s the latest indication that “bad news” economic data continue to have less influence on markets than other tailwinds — AI, namely.

Everything is computer

The S&P 500 would be having a mediocre year without AI.

Just four Big Tech stocks — Nvidia, Microsoft, Meta, and Broadcom — account for 60% of the benchmark index’s total returns so far this year, according to a new analysis from DataTrek Research.

They’re also responsible for pushing headline valuation levels to dot-com bubble levels.

The S&P 500 currently trades at 22.1x forward earnings. Take away those four mega-cap stocks and the multiple falls to 19.4 — closer to the 10-year average of 18, and just under the “defensible” range of 20, DataTrek co-founders Nicholas Colas and Jessica Rabe said.

“If there had been no Gen AI buzz this year, the S&P 500 would likely be up 3-4 percent instead of 10 percent,” they wrote in a client note Thursday.

Those numbers not only underscore just how top-heavy the market has become, but how much investors are betting on a single investment theme.

Consider:

• Nvidia accounts for 2.6 percentage points of the S&P 500’s year-to-date return

• Microsoft accounts for 1.6 points

• Meta accounts for 0.9 points

• Broadcom accounts for 0.8 points

That concentration suggests that even a minor stumble in AI momentum or sentiment could catalyze a double-digit wipeout in the broad index.

Yet, as Opening Bell Daily has covered, the technology businesses today are highly profitable — unlike those in the late 1990s — and control what’s arguably the most important infrastructure buildout of the century.

Colas and Rabe noted that this theme extends beyond US markets.

Investors around the world are overweight US Big Tech. In fact, Nvidia’s allocation within the MSCI All Country World Index is larger than every country except the US:

• Nvidia: 5.1% weighting

• Japan: 4.9%

• UK: 3.26%

• China: 3.06%

Framed this way, any talk of allocating to emerging markets or developed markets is effectively moot.

“Even when considering global (rather than just US large cap) portfolio allocations, the only call that really matters is to be over or underweight US tech,” Colas and Rabe said.

Market snapshot

Elsewhere

🏥 Warren Buffett revealed a new stake in UnitedHealth stock. Berkshire Hathaway bought more than 5 million shares in the battered healthcare name last quarter worth roughly $1.6 billion. It also added stakes in DR Horton, Lennar and Nucor, while cutting its Apple and Bank of America stock. (CNBC)

📈 July PPI inflation rose at fastest monthly pace since 2022. Wholesale prices moved higher than expected, coming in above all 50 Bloomberg economists’ expectations. That said, market odds for a September rate cut barely budged. (Axios)

📊 Retirement accounts are all-in on stocks. Americans are increasingly investing their 401(k) accounts in equities. Even target-date funds, which are designed to shift to bonds are you age, have started to allocate more into equities. (WSJ)

🏦 The case for rate cuts just got murkier. Even a September cut looks like a shoe-in, some strategists believe record high stocks and crypto suggest a pause could still be warranted. Meanwhile, the unemployment rate remains historically low. (Barron’s)

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Rapid-fire

• Prediction markets see 63% odds Scott Bessent attends Trump and Putin’s meeting in Alaska (Kalshi)

• Intel stock surged after reports emerged the US is weighing taking a stake in the company (Reuters)

• The Port of Los Angeles — busiest in the country — reported its highest monthly container volume ever in July (Yahoo Finance)

• Mortgage rates dropped to the lowest level of 2025 (WSJ)

• Saudi Arabia’s wealth fund just took an $8 billion write down at the end of 2024 (CNBC)

• Blue states are hunting for ways to get more taxes from the wealthy (WSJ)

• Oil is hovering at a two-year low ahead of Trump-Putin summit (Bloomberg)

• The share of US homes seeing price cuts rose to 25.6% in June (ResiClub)

• Wall Street’s fear gauge is hovering at its lowest levels of 2025 (Opening Bell Daily)

Last thing

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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.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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