The US stock market strengthened overall last week, with all three major indices closing higher. Driven by large-cap technology stocks, the S&P 500 and Nasdaq Composite recorded weekly gains. Friday's closing data showed the S&P 500 rose 0.42% to 7,575.39, the Nasdaq Composite gained 0.29% to 26,281.61, and the Dow Jones Industrial Average edged up 0.29% to 52,637.01. For the week, both the S&P 500 and Nasdaq surged over 1%, while the Dow slipped slightly by 0.5%, indicating that market gains remain highly concentrated in technology and artificial intelligence-related sectors.
In terms of individual stocks, Nvidia and Meta emerged as key forces driving the tech sector's recovery. Nvidia's stock rose approximately 4% on Friday, continuing to support the S&P 500's upward trajectory. Meta performed even more prominently, surging about 6% in a single day and accumulating a weekly gain of nearly 15%, marking its best weekly performance since early 2024. Institutions maintaining buy ratings noted that the company may be improving its artificial intelligence cost structure, news that further boosted investor confidence.
The momentum in the chip sector also extended to the IPO market. South Korean memory chip manufacturer SK Hynix's American Depositary Receipts officially listed on Nasdaq on Friday, opening above the issue price and closing with a gain of nearly 13%. Influenced by this, the South Korean stock market led gains in the Asia-Pacific region on Friday, with the KOSPI Index rising 2.5% and Japan's Nikkei 225 Index closing up 1.2%. In contrast, China's CSI 300 Index fell 1.96%, mainly dragged down by technology and industrial sectors, while Europe's Stoxx 600 Index remained basically flat.
Although chip stocks have posted astonishing gains this year, with some individual stocks even doubling, concerns are rising about a potential pullback following the boom in the second half of the year. Market strategists stated that since the rise of the artificial intelligence boom, excitement has been strong and the market is clearly in a boom phase, but adjustments in the second half need to be guarded against. This reflects the core contradiction in the current market: artificial intelligence remains the main driver pushing US stocks higher, but high gains, high valuations, and high expectations also make investors worry that once earnings or capital expenditures fall short of expectations, related trades could experience sharp volatility.
Expectations of easing geopolitical tensions also supported market sentiment in the latter half of the week. With oil prices falling, concerns about an inflation resurgence were alleviated. Reports indicate that relevant parties are advancing a solution to the Middle East conflict, with technical negotiations still ongoing, contrasting with earlier hardline statements. The decline in oil prices provided certain support for the stock market.
In terms of asset allocation, diversification strategies have performed brilliantly this year. Investment bank strategists pointed out that a portfolio consisting of US stocks, bonds, commodities, and cash each accounting for one-quarter has achieved an annualized return rate of 16% this year, marking the best performance since 2021. Although stock market concentration is high, asset allocation diversification is playing a role, and institutions continue to be optimistic about long-term turning point opportunities in commodities, emerging markets, small-cap stocks, and consumer stocks.
Furthermore, regarding market performance before large IPO listings, analysis institutions pointed out that investors often sell part of their existing holdings to raise cash for participating in new share issuances, which may cause short-term pressure on the stock market. Historical data shows that in the two weeks before US IPOs exceeding $10 billion, the S&P 500 Index median drop was 1.3%, but this weakness is usually temporary, and the index median usually rebounds within one month after listing. This means that short-term market volatility may largely reflect fund repositioning and technical pressure rather than fundamental deterioration.
