Positive July Trend US Stock Market’s Resurgence Since 1997
According to CNN, the US stock market experienced its best performance in July since 1997. The benchmark S&P 500 index recorded a remarkable 21% boost this year, a level of gain not seen in 26 years, as reported by S&P Dow Jones Indices data.
July also marked the fifth consecutive winning month for both the S&P 500 and the Nasdaq Composite, the longest monthly winning streak since 2021. However, the rally faced some challenges on the first trading day of August, with stocks showing volatility as investors assessed the mixed bag of second-quarter earnings.
CNN pointed out that August usually witnesses lower trading volumes and higher stock market volatility due to the summer travel season.
The media outlet attributed the stock market rally to a group of stocks known as the “Magnificent Seven.” These are stocks that possess both defensive and growth qualities and play significant roles in developing artificial intelligence products. The members of this group include tech giants Nvidia, Apple, Amazon, Alphabet, Meta Platforms, Microsoft, and Tesla.
Furthermore, the stock market received a boost from the second-quarter earnings season, which turned out better than expected. Refinitiv Lipper’s data revealed that nearly 81% of the 292 companies listed in the S&P 500 reported second-quarter results that exceeded analysts’ forecasts.
Some specific stocks saw remarkable gains this year, with Nvidia rising by 220%, Meta Platforms going up by 165%, Carnival gaining 134%, Royal Caribbean adding 121%, and Tesla increasing by 117%.
The recent rally has broadened, with Wall Street gaining confidence in inflation cooling down, the economy avoiding recession rumors, and the Federal Reserve concluding its rate-hiking cycle.
While the S&P 600 index, which tracks small company stocks’ performance, outperformed the broader index last month, CNN highlighted that the gains were not uniformly distributed across the board. An equal-weighted version of the S&P 500 underperformed year-to-date through July.
