Tech Companies Take The Wheel.
The NAS100 delivered a strong performance in July, rising by approximately 4% over the month and recording its third consecutive monthly gain. The Index achieved several new records, including a closing high of 23,542.6 on 30th July, as investor sentiment was buoyed by economic resilience and growing expectations of monetary policy easing. Central to this rally was the continued dominance of AI-focused mega-cap technology stocks, which remained at the heart of market enthusiasm. Nvidia emerged as a key driver, becoming the first publicly traded company to surpass a valuation of $4 trillion. Its shares surged following robust earnings and fresh approvals to export its advanced H20 AI chips to China, further consolidating its leadership in the generative AI sector. Alongside Nvidia, Microsoft, Meta, Alphabet and Amazon all posted significant gains, collectively contributing to a $500 billion increase in market capitalisation during the final week of the month. However, the heavy reliance on a small number of high-growth technology stocks also raised concerns about market breadth and valuation concentration, prompting questions regarding the sustainability of the rally.
Euro Struggles While U.S Holds Firm.
The Euro was burdened by a weakening economic outlook across key Eurozone countries. Persistent concerns regarding energy supply disruptions and elevated inflation in several member states continued to undermine investor confidence. Data releases depicted a subdued manufacturing sector alongside weaker than expected retail sales in multiple major economies, reinforcing apprehensions about the durability of the Eurozone’s recovery. In contrast, the US dollar remained resilient, supported by a series of encouraging economic indicators. Steady employment figures, moderate inflation, and robust consumer spending all contributed to the dollar’s strength. Market expectations increasingly centred on the Federal Reserve adopting a cautious stance, signalling a potential pause or gradual easing of interest rate adjustments in the short term. This outlook sustained demand for the greenback, particularly among yield-sensitive investors.