The S&P 500, the primary US equities index, touched record highs recently, led by the technology sector and the optimism around the artificial intelligence (AI) boom. A better-than-expected corporate earnings season and hopes of interest rate cuts by the Fed also supported sentiment.
“Solid US corporate profits and decent economic data have driven equity markets to record highs. With US markets back to extremely expensive levels, the market could see rotations towards other less expensive sectors and regions.”
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US markets reached new record highs last week on the back of AI-driven euphoria and corporate earnings above expectations.
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While markets have been driven by the large cap and tech sectors, this is also increasing concentration risks.
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With some areas of the US market back to extremely expensive levels, the market could see rotations towards other less expensive sectors and regions.
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