Strong first half of 2024 for U.S. stocks, AI leading gains, but market breadth issues worsening

From Nasdaq: 2024-07-01 11:09:54

U.S. stock markets saw a strong first half of 2024, with the Dow Jones hitting 40,000, S&P 500 surpassing 5,500, and Nasdaq jumping 18%. Nvidia briefly became the world’s most valuable company, reflecting the strength of AI stocks. Top S&P 500 gainers include Super Micro Computer, CrowdStrike Holdings, and Broadcom.

Despite pessimism, U.S. stocks performed well in the first half of 2024, defying expectations. The S&P 500 rose double digits, but market breadth issues have worsened. Valuations are above historical averages, with Warren Buffett holding a record cash pile. The Dow Jones underperforming Nasdaq by 14%.

Analysts forecast limited upside for the S&P 500, with a median year-end target of 5,500. Historical data shows a strong first half often leads to gains in the second half. Many analysts initially predicted a flat year for 2024 and have since raised their targets. Investors should monitor inflation and upcoming U.S. elections.

Key events to watch in the second half of 2024 include inflation trends, U.S. elections, and tech earnings growth. Corporate earnings and AI investments will impact stock prices. Despite concerns of a market crash, strong earnings growth is needed for significant stock gains. Analysts expect S&P 500 earnings to rise 11.3% in 2024 and 14.4% in 2025.



Read more at Nasdaq: Stock Market Forecast H2 2024: Will the ‘AI Rally’ Get a Reality Check?