S&P 500's Historic High Amid Tariff Turbulence: Where Contrarians Should Look Now

The S&P 500's record intraday high on July 7, 2025, at 6,280.46, defied a backdrop of escalating trade tensions, with President Trump threatening tariffs of up to 50% on key trading partners. This resilience signals a market betting on geopolitical noise as a short-term distraction rather than a long-term barrier. For contrarian investors, the key lies in sectors and stocks that are *thriving despite—or because of—the chaos.

The Paradox of Resilience: Why Tech and Data Centers Are Winning

The tech sector, led by AI leaders like NVIDIA (NVDA), has been the primary driver of the S&P's ascent. NVIDIA's $4 trillion market cap—achieved despite a U.S. ban on chip sales to China—highlights a paradox: companies with dominant, irreplaceable technologies can shrug off tariffs. Their products are too critical to global tech infrastructure for buyers to abandon easily.

Data center stocks, such as Equinix (EQIX) and Digital Realty (DLR), also defy gravity. Even as tariff threats on semiconductors and servers loom, AI's insatiable demand for computing power is fueling a buildout of global data centers. shows NVDA outperforming by over 40%, underscoring its trade-resistant profile.

Technical Indicators: A Buying Opportunity in Disguise

The S&P's recent performance offers clues for contrarians. The index remains above its 200-day moving average (6,150), a key support level, and its 50-day MA (6,200) has been rising steadily. Historically, such technical strength during geopolitical crises—like the 2019 U.S.-China trade war—has signaled buying opportunities.

Meanwhile, sectors like technology and communication services—both up over 9% in Q2—have shown remarkable drawdown recovery capabilities. After a 5% dip in early June, tech stocks rebounded to new highs, a pattern that suggests investor conviction in long-term trends over short-term noise.

The Contrarian Play: Why Data Centers and AI Are the Safe Bets

While markets may be complacent about tariff risks, two sectors offer asymmetric upside:

1. AI Hardware Leaders: NVIDIA's dominance in GPU manufacturing positions it to capitalize on AI's $200 billion annual spend by 2027 (per Goldman Sachs). Even with tariffs, its 70%+ market share in data center GPUs makes it hard to displace.

2. Data Center Infrastructure: Companies like Equinix, which operate global hubs for cloud providers, benefit from the pull-forward demand phenomenon. Clients are pre-buying capacity to avoid post-tariff price spikes, creating near-term cash flow tailwinds.

Beware the Risks: Complacency and the Tariff Tipping Point

The market's shrugging off of tariffs isn't without peril. A full implementation of Trump's 50% levies by August 1 could trigger a “TACO” (Trump Always Chickens Out) reversal—if he blinks. But if he doesn't, sectors tied to Asian supply chains—like Apple (AAPL) or Dell (DELL)—could falter.

Investors must balance optimism with caution. Focus on companies with:
- Geographic diversification: Look for firms like Microsoft, which sources globally but has U.S.-based cloud infrastructure.
- Margin resilience: Stocks with pricing power (e.g., NVIDIA's AI software) can offset cost hikes better than commodity players.

Final Call: Go Long on Trade-Proof Tech, Short on Complacency

The S&P's July 7 high isn't just a number—it's a statement of faith in tech's future. For contrarians, this is a call to overweight AI leaders and data center plays, even as headlines scream about trade wars.

shows its 15% CAGR outpacing the broader market, a trend likely to continue as AI adoption accelerates.

Action Items:
- Buy: NVIDIA (NVDA), Equinix (EQIX)
- Avoid: Tariff-exposed hardware makers reliant on Asian supply chains (e.g., Texas Instruments)
- Hedge: Use S&P put options to protect against a post-August 1 tariff shock.

The market's resilience is real—but its durability hinges on whether investors can separate the noise from the next wave of winners. For now, AI and data centers are the places to be.