On July 8, 2025, the US stock market reached another new high, and investment tracks that should not be overlooked in the second half of the year.

U.S. Stocks $S&P 500 Index(.SPX.US)$and $Nasdaq Composite Index(.IXIC.US)$ have once again reached a historic high before the Independence Day holiday. The U.S. is conducting trade negotiations with several countries, but the market is more focused on various Bullish bills. Following last month's cryptocurrency 'GENIUS Bill', this month's 'Big and Beautiful Bill' will also take effect. Today, let's take a look at the latest situation of U.S. Stocks and investment outlook.

From the S&P 500 Index chart above, the index has reached a historic high, and the technical trend last week issued a definitive 'Golden Cross' signal. Additionally, earlier, the MACD also issued a 'Double Bull' bullish signal (which is a high position Golden Cross), and multiple data support the S&P 500 Index still being in a major bull market.

In the first half of 2025, U.S. Stocks completed a 'V' shape, from concerns in the first quarter over Trump's trade policies dragging down the global economy to the TACO Trade derivatives in the second quarter of this year. The market is undoubtedly in an excited state.

From the valuation analysis, although the S&P 500 Index is currently at a new high, the current valuation level is cheaper compared to the beginning of the year. Based on the average of the past 10 years, the S&P 500 Index is only about 1.2 standard deviations above the 10-year average, compared to a standard deviation of 1.5 lower at the beginning of the year. The main reason is that many companies in the U.S. have shown strong performance over the past six months, and the increase in EPS has made valuations more attractive.

U.S. stock corporate earnings continue to benefit from the development of the AI sector, such as NVIDIA, Palantir, Broadcom, Netflix, etc. Other companies facing weak AI ROI issues also rely on systematic cost control methods to stabilize profits, such as Microsoft, Amazon, Meta, and Google. From a valuation perspective, unless the S&P 500 Index skyrockets above 6900 in the short term, discussing the risk of a U.S. stock market bubble is still premature.

Analyzing the latest non-farm data.

The U.S. non-farm data released last Thursday far exceeded market expectations, with the unemployment rate unexpectedly dropping to 4.1%, much better than the expected 4.3%; non-farm payrolls increased by 0.147 million, significantly beating the expected 0.111 million. Labor market data has strengthened market confidence in the U.S. economic outlook, leading to a surge in U.S. stocks, although expectations for interest rate cuts have indeed declined.

The latest interest rate futures show that the market currently expects a 95% chance that the meeting on July 30 will keep interest rates unchanged. The strong labor market means the Federal Reserve does not need to rush to cut rates, and they will continue to observe Trump's trade policies to adjust the pace of rate cuts. The cooling expectations for rate cuts have led to $U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ a rebound trend.

It is believed that the room for bond yields to rise will not be large unless recent trade negotiations between Trump and multiple countries break the TACO concept. The main reason is that the non-farm data is not as strong as imagined; if one pays attention to the details of the data, the average hourly wage in the U.S. increased by 0.2% month-on-month, which is worse than the market expectation of 0.3%, and is at a relatively low level in recent years. Additionally, the private sector added only 0.07 million positions, far below the market expectation of 0.137 million. These figures reflect that the inflation pressures currently facing the U.S. have significantly diminished, and the trend of disinflation remains unchanged; the space for rate cuts in the second half of the year will only become clearer as trade policies are implemented. In the long run, the downward trend of the risk-free interest rate should be sustained, which will continue to be bullish for the performance of the stock market and the financial market.

In this bull market, the US stock market involves two major investment themes, one being the development of Cryptos as a new revolutionary Concept opening up the financial market, and the other maintaining the popularity of AI for many years. Today, a brief introduction to these two investment Concepts.

1. Financial Reform of Cryptos

The entire hype Concept stems from the US's GENIUS Act, which, after improving the regulation of stablecoins, will develop from stablecoins to the RWA Concept. RWA (Real World Assets), through blockchain, tokenizes physical assets such as Real Estate and Bonds to achieve digital investment and Trade. The above are just some popular Concepts and examples. For instance, Robinhood recently introduced a new Concept, intending to trial tokenization of some unlisted companies like OpenAI or SpaceX in Europe, aiming to reduce trading costs or even replace IPOs.

However, it should be noted that many of the above are primarily conceptual in nature, and the development of these Concepts is still very long-term. Currently, market opinions are highly divided, for example,JPMorgan: It is expected that by 2028, the stablecoin market will reach a scale of 500 billion USD.According to the latest data, as of July 6, 2025, the total Market Cap of the global stablecoin market is approximately 255 billion USD. Although JPMorgan holds a positive view on the stablecoin market, their outlook is already more moderate.

Investors unfamiliar with Cryptos may worry that this new RWA will evolve into an NFT bubble in the Metaverse. However, both the GENIUS Act and Hong Kong's Stablecoin Regulation aim to ensure that the development of RWA will proceed under regulatory oversight for healthy growth. In simple terms, the nature will be significantly different, as tokenization connects valuable real-world assets, the ultimate goal of RWA development is simply to drive down market trading costs and further enhance the liquidity of the financial market.

The investment Concepts mentioned above are likely to benefit large financial companies. With improved liquidity and diversified trading, their profitability can be directly enhanced, which is why many large financial companies currently have their Company Valuation elevated to historical highs. Considering the current valuation levels, as the market has generally formed an optimistic expectation, valuations are now being viewed from a PEG perspective. It is advisable to apply technical analysis to assist in investing in such companies, as following the trend is a more suitable strategy.

The scope of the Stocks involved includes, but is not limited to: $JPMorgan(JPM.US)$ $Goldman Sachs(GS.US)$ $Morgan Stanley(MS.US)$ $Citigroup(C.US)$ $Robinhood(HOOD.US)$ $Coinbase(COIN.US)$ $Circle(CRCL.US)$

2. AI Industry 4.0

The investment Industry Chain derived from NVIDIA has always been the main investment line in the US stock market, something everyone is familiar with. This year, NVIDIA's Blackwell successfully went into production and mass production, with high computing power leading to a decrease in inference costs. Many companies continue to allocate resources, and some LLM large models are even starting to generate considerable revenue. According to reports from Bloomberg, CNBC, and Reuters, OpenAI's revenue is expected to grow from $3.7 billion in 2024 to $12.7 billion in 2025, a growth rate of about 243%.

The investment across the entire Industry Chain is not just about semiconductors, but also related energy, energy consumption, cooling, AI networks, AI network security, and more. More importantly, after experiencing a V-shaped trend in the US stock market for half a year, many companies' operational strategies align with their own valuation levels. The best example of this is Microsoft.

The cost pressures from the company's investments in AI and cloud Business have always limited stock performance in the second half of 2024, but after a series of layoffs and reductions in cloud computing investments, a robust financial report published on April 30 immediately caught up with the lagging stock price. The market's view shifted from an unsatisfactory AI ROI to a diversified Business model with stable cash flow, combined with the partnership with OpenAI driving significant contributions from Copilot and Azure OpenAI services, resulting in constant increases in Company Valuation.

Microsoft is just one example showing that major US Technology companies can conditionally transfer or reduce cost pressures, thereby maintaining growth stories. Considering that the latest BATMMAAN each has their own characteristics in different fields, many of these large Technology companies are worth paying attention to.

The range of involved Stocks includes but is not limited to: $NVIDIA(NVDA.US)$ $Broadcom(AVGO.US)$ $Apple(AAPL.US)$ $Microsoft(MSFT.US)$ $Meta Platforms(META.US)$ $Alphabet-C(GOOG.US)$ $Amazon(AMZN.US)$ $Palantir(PLTR.US)$ $Netflix(NFLX.US)$ $Tesla(TSLA.US)$

Futu Securities Chief Analyst Tan Zile.

(The author is a licensed person from the Securities and Futures Commission, and neither the author nor their related parties have any financial interests in the suggested issuers.)