Renewable Energy Paradox; Datacenter Slowdown; and S&P 500 Recovery

After hitting its lowest point in almost a year in April, the S&P 500 has rebounded significantly, recovering nearly all of its losses in just two months. The index, which fell 18.9% to its lowest point on April 8 following President Trump’s tariff announcements, had surged over 20.5% by June 9, nearing its all-time high from Feb. 19.

However, this rally raises concerns about market breadth, as it is largely driven by the performance of a select group of mega-cap technology stocks, dubbed the Magnificent Seven. These stocks — NVIDIA, Tesla, Meta Platforms, Microsoft, Amazon, Alphabet and Apple — have shown an average increase of 31.7% since April 8, despite having dropped an average of 26.8% earlier in the year. This concentration in tech stocks may undermine the sustainability of the overall market rally.