Wall Street Rallies: Small Caps Join the Record Party

A Rally That’s No Longer Just About Big Tech

Wall Street kept the champagne corks popping on Thursday.

The S&P 500 (+0.9%), Nasdaq (+1.1%), and Dow Jones (+0.4%) all notched fresh records, but the real star was the Russell 2000 (IWM | +2.49%), finally breaking into record territory as small- and mid-cap stocks caught up with their mega-cap peers.

The Fed’s first rate cut of 2025 (25 bps) continues to provide tailwinds, and now even the “little guys” are in on the action.

Intel Electrified by Nvidia Deal

Intel (INTC | +22.27%) had its best day in years after Nvidia (NVDA | +3.49%) announced a $5 billion investment. The deal signals a new era of cooperation between the once-fierce rivals, as they team up on chips for PCs and data centers.

For Nvidia, combining its GPUs with Intel’s CPUs could sharpen its edge against AMD, which briefly tanked over 5% on the news before clawing back most of the loss.

Meanwhile, Arm Holdings (ARM | -4.45%) was hit as investors recalibrated which chipmakers stand to win - or lose - from this unexpected alliance.

CrowdStrike Strikes Again

CrowdStrike (CRWD | +12.82%) lit up the cybersecurity sector after its AI-focused update at the Fal.Con 2025 event. Management outlined ambitious growth targets: subscription revenue increasing at least 20% annually by 2027, and free cash flow margins topping 30%.

Analysts rushed to lift their price targets, KeyBanc to $510, Truist to $550, and Jefferies to $515. Investors clearly believe AI-driven security agents will be more than just buzzwords.

Nuclear Energy Back in the Spotlight

President Trump’s visit to the UK gave nuclear stocks a glow. Washington and London signaled plans for deeper cooperation in nuclear technology, boosting American reactor developers.

Oklo(OKLO | +10.16%), NuScale Power (SMR | +5.51%), Centrus Energy (LEU | +14.12%), and BWX Technologies (BWXT | +3.36%) all surged. With energy security still high on the agenda, nuclear looks set to remain a hot sector.

Healthcare and Industrials: Winners and Losers

In pharma, Novo Nordisk (NVO | +6.27%) impressed with fresh Ozempic data showing a 23% reduction in cardiovascular risks versus Eli Lilly’s rival drug. On the flip side, Nucor (NUE | -5.95%) fell after cutting its quarterly outlook, reminding investors that not all sectors are basking in the current market glow.

Macro and Geopolitical Undercurrents

• The Fed’s latest projections hint at two more rate cuts this year, though divisions remain over how quickly to move.

• Weekly jobless claims fell, and the Philly Fed index showed signs of recovery, easing some recession fears.

• Geopolitically, U.S.–China talks continued over TikTok and tariffs, with Trump and Xi possibly speaking today.

Final Take

It wasn’t long ago that critics dismissed the 2025 rally as a “Magnificent Seven” sideshow. Yesterday proved them wrong.

With small caps, nuclear energy, and cybersecurity joining the party, this market looks broader and stronger. Still, with Fed policy and geopolitics in flux, it’s worth keeping the seatbelt fastened, even on this record-setting ride.

---

Kristoff - ChartMill

Next to read: Market Breadth Improves Sharply After Midweek Setback