3 July 2023

Tech giants lifted stock markets in the first half of this year

The S&P 500 index rose 16% thanks to seven large technology companies, while the NASDAQ posted a strong six-month growth with a 32% gain. Investors have shown interest in the technology-focused companies within the index, which they expect will benefit from the growth of artificial intelligence.

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A handful of large technology companies, including Apple, Amazon, Microsoft, Nvidia, Alphabet, Meta and Tesla, have played a significant role in the market's growth. Apple, for example, recently reached a new all-time high, with a valuation in excess of US$3 trillion, surpassing that of the 100 largest companies listed on the UK stock exchange or the entire Russell 2000 index of smaller US companies. Nvidia, which is also benefiting from investor enthusiasm around artificial intelligence, has seen its market capitalisation rise by more than US$600 billion this year alone and has almost trebled in value since the start of the year.


Despite market growth in the first half of the year, some analysts and investors are skeptical about the sustainability of this growth trend. Concerns revolve primarily around the Federal Reserve's relentless efforts to fight inflation, raising fears of a possible economic downturn in the US. In contrast, European indices also posted strong gains as investors bet on slowing inflation in the eurozone and anticipated that European Central Bank interest rates had peaked. Europe's Stoxx 600 index closed the half-year with a gain of almost 9%. Europe, however, saw the largest capital outflow among the major regions, at USD 4.6 billion, driven by investors' preference for growth stocks and technology giants, which have a larger presence in the US.