Big Tech is back on top. Investors are returning to the familiar comforts of the Magnificent Seven stocks in the face of the tariff concerns. But safe haven they are not.

The Nasdaq Composite is back in positive territory in terms of the year so far, and technology stocks are the driving force. Chip maker Nvidia is the world's most valuable company again, for the first time since January, as the artificial-intelligence trade thrives despite U.S.-China tensions.

That's a big positive as markets await a call between President Donald Trump and China's Xi Jinping to talk trade. But, the Chinese leader might be emboldened after Trump labeled him "EXTREMELY HARD TO MAKE A DEAL WITH!" in a post on social media overnight.

The attractions of tech include strong growth, booming AI demand, and exemptions from tariffs for smartphones, PCs and chips. While Band-Aid maker Kenvue was warning of retailers cutting back on orders Tuesday, server company Hewlett Packard Enterprise was raising its profit forecast. Goodbye defensive consumer staples, traditionally high-risk tech is now being seen as the new shelter from the tariff storm.

But that optimism might be overdone. An investigation by the Commerce Department into the semiconductor sector could eventually result in tariffs on imported chips, but it has to complete a report on the national security implications first. Nvidia could face a severe blow if a 25% or higher levy is imposed on chips coming in from Taiwan.

Some may wonder if Trump would be willing to hit the companies driving such stock market gains? Well, he's already picked a public fight with Apple CEO Tim Cook who is resisting making iPhones in the U.S., stopped Nvidia from selling chips to China, and he even looks set to fall out with his friend, and Tesla boss Elon Musk, over his tax bill. Big Tech might be riding high at the moment, but it's unlikely to be a safe play for long.

-- Adam Clark

***

Musk Calls Tax Bill a "Disgusting Abomination." Some Agree.

Elon Musk's criticism of the Republican tax and spending bill currently in the Senate as "a disgusting abomination" could complicate its passage by emboldening those GOP hard-liners who believe the plan balloons the deficit and doesn't cut enough spending. The bill is estimated to add $3.8 trillion to the deficit.

   -- Musk's post on social media called it a "massive, outrageous, pork-filled 
      congressional spending bill" and said those who voted for it -- all but 
      two Republicans in the House -- did wrong. The White House still calls it 
      the "One Big Beautiful Bill" and released 50 talking points in its 
      defense. 
 
   -- Some Republicans are siding with Musk. Utah GOP Sen. Mike Lee urged his 
      fellow lawmakers to "make this bill better." And Kentucky Rep. Thomas 
      Massie, one of the no votes last month, said, "He's right." White House 
      press secretary Karoline Leavitt said President Donald Trump is "sticking 
      to it." 
 
   -- The Committee for a Responsible Federal Budget says the bill would add $3 
      trillion to $5 trillion to the national debt over a decade even with big 
      cuts to Medicaid spending. Analysts expect the Senate to pare back some 
      of those Medicaid cuts. The Senate wants to wrap up its work by July 4. 
 
   -- Sens. Ron Johnson of Wisconsin, Rick Scott of Florida, and Utah's Lee 
      have raised concerns over the lack of spending cuts. Kentucky Sen. Rand 
      Paul has also said he opposes a provision raising the debt ceiling. They 
      could torpedo the bill if they stick together and all Democrats oppose 
      it. 

What's Next: If Republicans can't find consensus on a bill that raises the debt ceiling by an estimated August deadline, they'd have to negotiate a solution with Democrats and likely make concessions. Speaker Mike Johnson told reporters Tuesday "my friend Elon is terribly wrong."

-- Al Root and Liz Moyer

***

Nvidia Stock Overcomes Tariff Worries as It Leapfrogs Microsoft

Nvidia has regained its title as the largest U.S. company by market value for the first time since Jan. 24, despite looming U.S. tariffs on semiconductors and export curbs on some of its most important products. It leapfrogged Microsoft on Tuesday, closing with a $3.45 trillion market value.

   -- One catalyst was the investment bank Jefferies, where analysts added the 
      chip maker to its list of highest-conviction stock picks. Shares 
      surpassed $140 after last week's earnings report, but investors remain 
      uneasy as tariff tensions flare up between China and the U.S. 
 
   -- Equity analyst Blayne Curtis expects the ramp of Nvidia's Blackwell 
      artificial-intelligence chips to drive its gross margin to between 70% 
      and 80% this year, up from 61% as of its fiscal first quarter ended April 
      27. Curtis sees a favorable setup for Nvidia in the second half of 2025. 
 
   -- UBS analyst Timothy Arcuri said investors overlooked Nvidia management's 
      comments on its pipeline during last week's earnings call, including 
      visibility into "tens of gigawatts" of AI infrastructure projects in the 
      "not-too-distant future." Arcuri sees a minimum total revenue opportunity 
      of $1 trillion for this pipeline. 
 
   -- Investors might be cautious amid the prospect of semiconductor tariffs. 
      The Commerce Department is investigating potential levies on imported 
      chips under Section 232 of the 1962 Trade Expansion Act, which allows the 
      president to impose duties on imports considered a national security 
      threat. 

What's Next: Dave Sekera, chief U.S. market strategist at Morningstar, wrote that from the point of view of wanting exposure to AI, "Nvidia is still the bellwether for growth." Meta, which announced a 20-year agreement with Constellation Energy, primarily uses Nvidia AI chips to power its workloads.

-- Mackenzie Tatananni, Adam Clark, and Janet H. Cho

***

Fed Lifts Asset Cap on Wells Fargo After 7 Years

In a historic moment for the U.S. financial industry, the Federal Reserve said Tuesday that it lifted the unprecedented growth restriction it imposed on Wells Fargo, the country's third-largest bank, seven years ago as a result of customer abuses that surfaced in 2016.

   -- "The removal of the growth restriction reflects the substantial progress 
      the bank has made in addressing its deficiencies and that the bank has 
      fulfilled the conditions required for removal of the growth restriction," 
      the Fed said. 
 
   -- The move was widely expected among investors, analysts, and bank 
      executives. The lender cleared a series of consent orders this spring 
      that left just two remaining: The rare limitation on growth -- known as 
      an asset cap -- and a decade-old order from the Office of the Comptroller 
      of the Currency banking regulator, which was terminated last week. 
 
   -- "The Federal Reserve's decision to lift the asset cap marks a pivotal 
      milestone in our journey to transform Wells Fargo," CEO Charlie Scharf 
      said Tuesday. "We are a different and far stronger company today because 
      of the work we've done." 

What's Next: Stock analysts have turned more optimistic on the bank and its earnings potential as it clears the regulatory hurdles. Now that the asset cap is being lifted, it might clear the way for a broader base of investors to buy Wells stock.

-- Rebecca Ungarino and Elsa Ohlen

***

Meta's Nuclear Deal Signals AI Boom Is Early Innings

A 20-year deal by Meta Platforms to buy nuclear power from Constellation Energy is a sign Big Tech's artificial intelligence boom is just beginning. Meta is making progress on a goal to add up to four gigawatts of new nuclear generation capacity in the U.S. by the early 2030s.

   -- Technology rivals including Alphabet, Amazon, and Microsoft are aiming to 
      secure reliable, around-the-clock electric generating capacity for their 
      large data centers. Meta is buying around 1.1 gigawatts of energy from 
      Constellation's Illinois nuclear plant starting in June 2027. 
 
   -- The facility will continue to supply energy to the regional grid rather 
      than power Meta's data centers directly, Constellation said. The deal 
      with Meta will support its commitment to match 100% of its electricity 
      use with clean, renewable energy. 
 
   -- The Illinois plant had faced potentially closing when its zero-emission 
      credit expires in 2027. Constellation CEO and President Joe Dominguez 
      said Meta's billions of dollars of capital would help cover the costs of 
      re-licensing, upgrades, and maintaining the Illinois plant. 
 
   -- Meta's moves suggest large tech companies are making a long-term 
      commitment to supporting the growth of AI infrastructure. Meta has raised 
      its 2025 capital spending forecast to a range of $64 billion to $72 
      billion, up from $60 billion to $65 billion. 

What's Next: This isn't the first time Meta has expressed an interest in nuclear energy. In March, the Facebook and Instagram parent added its name to the World Nuclear Association's "Large Energy Users Pledge," which envisions at least tripling global nuclear capacity by 2050.

-- Mackenzie Tatananni, Tae Kim, and Janet H. Cho

***

Trump Officially Raises Steel Tariffs. Still No Clarity on China.

As expected, President Trump signed an executive order raising the tariffs on imported steel and aluminum to 50% from 25% effective today. The order excludes imports from the United Kingdom from the increase at least through July 9 while the two countries work out the details of a deal agreed upon in early May.

   -- There's still no clarity on the status of U.S.-China trade talks. At a 
      press conference Tuesday afternoon, White House press secretary Karoline 
      Leavitt said the president and China's President Xi Jinping will have a 
      call "very soon" but didn't specify when. 
 
   -- The White House confirmed it has asked countries to submit their best 
      trade offers by today to speed up negotiations. So-called "reciprocal" 
      tariffs on imports from around the world are suspended until July 8, and 
      administration officials have indicated deals are in the works. 
 
   -- The Commerce Department is also investigating imports of copper, timber 
      and lumber, semiconductors, pharmaceuticals, trucks, critical minerals, 
      and commercial aircraft and jet engines for possible sector-related 
      tariffs. Comment periods have ended but final reports aren't due until 
      later this year. 
 
   -- Ford Motor's U.S. vehicle sales jumped 16% in May from a year ago, but 
      they could weaken once tariff-induced price increases and the end of 
      sales promotions happen this summer. Sales momentum was slowing through 
      May, said Citi analyst Mike Ward. 

What's Next: Discount retail chain Dollar General raised its outlook for same-store sales this year to 1.5% to 2.5%, though management warned that tariffs could pressure consumer spending and consumer behavior.

-- Anita Hamilton and Brian Swint

***

Dear Quentin,

My elderly mother has just shy of $1 million in various accounts. I am the trustee of this account. I sent the advisor a message six days ago asking him to reach out to me as multiple CDs have matured and the money is now just sitting in cash. He has not been proactive in reinvesting this cash, which amounts to hundreds of thousands of dollars.

I did not hear back from him.

I called yesterday first thing in the morning and left a message with his assistant as he was "on the other line." No callback yesterday, nothing today and after office hours on the East Coast. My own advisor gets back to me within 24 hours, so I am not used to this way of doing business and, quite honestly, I am getting very frustrated.

What do you feel is a reasonable time frame for a callback from a financial advisor?

-- Fed Up

Read the Moneyist's response here.

-- Quentin Fottrell

***

-- Newsletter edited by Liz Moyer, Rupert Steiner

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 04, 2025 06:50 ET (10:50 GMT)

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