{"id":5346,"date":"2025-07-21T18:33:09","date_gmt":"2025-07-21T18:33:09","guid":{"rendered":"https:\/\/bitunikey.com\/news\/wall-street-rallies-as-ai-hype-meets-earnings-reality\/"},"modified":"2025-07-21T18:33:13","modified_gmt":"2025-07-21T18:33:13","slug":"wall-street-rallies-as-ai-hype-meets-earnings-reality","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/wall-street-rallies-as-ai-hype-meets-earnings-reality\/","title":{"rendered":"Wall Street rallies as AI hype meets earnings reality"},"content":{"rendered":"
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Stocks climbed toward record highs on Monday as investors looked past tariff tensions and focused on upcoming tech earnings. <\/p>\n

The Dow rose 220 points (0.52%), while the S&P 500 and Nasdaq gained 0.58% and 0.75%, respectively.<\/p>\n

Traders are piling into tech shares ahead of key results from Alphabet and Tesla, both set to report on Wednesday. Optimism is high\u2014but so are valuations, drawing warnings from economists who see signs of a growing AI-fueled bubble. Apollo\u2019s chief economist, Torsten Slok, said valuations for top S&P 500 firms, such as Nvidia, Microsoft, and Apple, now exceed their peaks from the dot-com era.<\/p>\n

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Dow Jones Industrial Average heatmap | Source: TipRanks<\/a><\/figcaption><\/figure>\n

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Traders are bidding up tech stocks ahead of key earnings reports. Notably, both Alphabet and Tesla will release their earnings on Wednesday, the first among the major tech giants this quarter. Strong results could validate the market\u2019s optimism and high valuations. <\/p>\n

Still, the market\u2019s focus on the AI sector is increasingly drawing comparisons to the 1999 tech bubble. Torsten Slok, the chief economist at Apollo Global Management, stated that the AI bubble could be even worse than the dot-com bubble.<\/p>\n

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Torsten Slok: “The difference between the IT bubble in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s” pic.twitter.com\/OEervHU4WG<\/a><\/p>\n

\u2014 zerohedge (@zerohedge) July 16, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Slok explained that the top 10 companies in the S&P 500 are now more overvalued than they were in the 1990s. Specifically, he compared the P\/E ratios of major firms such as Nvidia, Microsoft, and Apple, and found they were higher than at the absolute peak of the dot-com bubble. <\/p>\n

EU readies response as trade war escalates<\/h2>\n

Moreover, traders remain concerned over U.S. trade policy, as tensions with the EU escalate. The European Union is preparing for a trade reprisal if it doesn\u2019t get a deal with the U.S. \u201cIf they want war, they will get war,\u201d WSJ quoted<\/a> one German official referencing the trade negotiations.<\/p>\n

This is a response to President Donald Trump\u2019s escalating demands toward the EU and other trading partners. Earlier, Trump pushed<\/a> for a 20% minimum tariff on EU goods, up from 15% proposed earlier. On the other hand, the EU aims to obtain a 10% baseline tariff, with special consideration for certain industries.<\/p>\n

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