US stocks hit new high in run-up to Independence Day

You can’t keep a good market down, and that has certainly been the case in the second quarter as the S&P 500 and Nasdaq Composite rallied hell-for-leather to make new all-time highs this week, helped by stronger-than-expected payrolls data, in time for the Independence Day market holiday.

It has been a strange rally, with the Russell small-cap index making the lion’s share of the gains, while tech stocks have been more bystanders than standard bearers, but inevitably names such as Nvidia have returned to hog the limelight as valuations once again approach record levels.

Other semiconductor stocks such as Cadence and Synopsyis have also been in the spotlight this week after the US lifted curbs on sales of certain chip design software to China, a market which accounts for around 10% of revenue for the big players.

Chip stocks and solar stocks may seem unlikely bedfellows, but names such as Array Technologies, SolarEdge Technologies and Sunrun have made big gains this week after the Senate passed President Trump’s spending bill without an excise tax on solar or wind projects.

Centene

Healthcare specialist Centene saw its shares tank almost 40% on Wednesday (2 July) after the provider of plans for government-backed healthcare programs pulled its full-year guidance due to weak growth and higher-than-expected costs.

The St. Louis-based company said a preliminary analysis of 22 of the 29 states in which it offers marketplace coverage showed an estimated $1.8 billion revenue shortfall, corresponding to an EPS (earnings per share) impact of approximately $2.75.

To put that into context, it is equivalent to around 38% of the company’s prior full-year EPS expectation of $7.2 per share.

The news dragged down other healthcare insurers including UnitedHealth which fell 5% and Elevance Health which sank 11.5% in sympathy.

Looking ahead to 2026, the company said it had started the process of adjusting rates to reflect a higher projected baseline of morbidities than previously expected. The shares have lost around half their value over the last year.

Oracle

We previously pondered why markets had been slow to the emerging Oracle data centres story, but confirmation this week it had won a $30 billion data deal saw the stock jump more than 8% to new all-time highs of $237 and change.

Oracle said in an SEC filing on 30 June that chief executive Safra Catz was expected to tell colleagues the company’s current fiscal year was off to a ‘strong start’, with its MultiCloud database revenue continuing to grow at more than 100%.

Catz was expected to say Oracle had signed multiple large cloud services agreements, including one which is expected to contribute more than $30 billion in annual revenue starting in the 2028 financial year, but did not name the customer.

Bloomberg has since named the client as OpenAI, the Sam Altman firm which got the whole AI buzz going, reporting it had agreed to use computing power from Oracle data centres as part of the Stargate initiative, citing people familiar with the work.

This is just the sort of deal that will give the market confidence Oracle can crash the hyperscale cloud party thus far dominated by AWS, Azure and Google Cloud. It was a major reason why Shares pitched Oracle stock back in September 2024 at $165.95. Nine months on and the share price is 43% up.

Tesla

Shares in electric vehicle maker Tesla ticked 2.4% lower to $316.5 this week, defying the generally bullish mood, although the stock actually rose after the once fast-growing group posted a 14% year-on-year drop in second-quarter deliveries to 384,122.

While this marked a second quarterly decline for the Texas-based company, the numbers were better than Wall Street analysts had feared.

Deepwater Asset Management’s Gene Munster expects the second quarter to mark the bottom for Tesla, which faces fierce competition from Chinese EV makers as well as legacy Western auto giants.

In Germany, previously one of the company’s core European markets, Tesla unit sales fell 60% in June while overall EV sales rose 9% and BYD's sales increased threefold.

Moreover, sales of the Cybertruck have been woefully short of estimates this year with some analysts now referring to the controversially-styled model as the ‘Cyberdud’.

Tesla is also suffering from brand damage as a result of chief executive Elon Musk’s political ties: Musk was President Trump’s biggest financial backer in last year’s election, but the pair have fallen out spectacularly and continue to feud over Trump’s massive Republican spending bill, which the President wants Congress to pass by 4 July.