However, there are uncertainties about the market's performance for the rest of the year due to factors such as the upcoming US presidential election and the path of interest-rate cuts. Despite these uncertainties, historical data suggests that a strong first half usually leads to a solid performance in the second half of the year. Some strategists believe that companies outside of tech may drive the next surge in stocks.
Key takeaways:
- A boom in artificial intelligence fueled a strong first half for the US stock market, with the S&P 500 Index climbing 14% since the beginning of January.
- Despite signs of economic cooling, the rally is being supported by a Federal Reserve considering when to trim rates after a disruptive tightening campaign.
- AI chipmaker Nvidia contributed the most to the S&P 500’s rally in 2024, rallying roughly 150% on a total return basis.
- Historically, a strong first half for the S&P has typically led to another solid run in the remaining six months, with the index rising by a median of roughly 10% in the second half when it climbs more than 10% through June.