Big Tech stocks, including Nvidia and Microsoft, are leading a significant rebound in the S&P 500, which is now within 4% of its record high. This recovery is largely attributed to easing trade tensions between the US and its partners, alongside strong earnings reports from major tech companies. Nvidia's recent earnings exceeded expectations, bolstering confidence in the sector's growth potential despite ongoing challenges such as US restrictions on chip sales to China. The Magnificent Seven stocks are outperforming the broader market, contributing to nearly half of the S&P 500's rally since April.

Despite the positive momentum, concerns remain regarding the high valuations of Big Tech stocks, which are trading at 30 times projected profits compared to the S&P 500's 21 times. Analysts express caution about being overly invested in tech due to potential market volatility and the impact of tariffs. However, some experts believe that continued investment in artificial intelligence and cloud computing will drive further growth in the sector, suggesting that Big Tech could be a key market catalyst in the latter half of 2025.