The US stock market is sitting at all-time highs, but the rally has been unusually narrow. Almost all the gains have come from a few megacap tech names. Since April, the S&P 500 has jumped about 27%, with the “Magnificent Seven” now making up roughly one-third of the index. Nvidia alone accounts for around 8%, while Microsoft and Apple make up about 7% and 6%. Together, those three represent more than a fifth of the S&P. That raises a simple question: can a rally powered by so few stocks keep going, or is momentum starting to crack?
Oil has this ability to grab the centre stage. A big swing in crude prices can reset inflation expectations almost overnight, unsettle central banks, and shuffle stock-market winners and losers. Think back to 2022. Crude shot up as economies reopened and supply chains buckled, feeding one of the sharpest inflation spikes in decades. The Energy sector loved it. Tech, not so much. Which makes you wonder if oil is really pulling the strings, or just playing a noisy side role?
Inflation was the main theme this week. In the US, consumer prices rose 0.2% in July, bringing the annual rate to 2.7%, in line with expectations. What stood out was core inflation, up 0.3%, the fastest pace in six months. Producer prices also surged nearly 1%, the biggest increase in three years, raising concerns that tariffs could be lifting costs for consumers.
Gold has long been a go-to for those looking to hedge against inflation or simply sleep better when markets get shaky. But here’s the question: what happens when interest rates, especially real, inflation-adjusted ones start heading north?
