In the second quarter just passed, the United States stock market and the gold market emerged from a clear division. The US stock, backed by AI transactions and corporate profits, has expanded significantly, while gold is one of the worst single-season performances in more than a decade, as a result of the Federal Reserve policy’s anticipated shift, the strengthening of the dollar and the flow of funds.
The U.S. shares are boosted by chips.
In the second quarter, the index increased by 15 per cent, the NASDAQ index by 21 per cent, all of which was the best quarterly performance since 2020; the Dow Jones industry averaged 13 per cent, the strongest quarter since 2022.
The core driving force of the movement comes from the AI related plate. American Light Technology has risen by 242 per cent in a single season, AMD by 186 per cent, Chase by 22 per cent, and England by 15 per cent. The Philadelphia semiconductor index rose by 88 per cent as a whole, making the best quarterly record in history.
Business profits also support the stock market. The FactSet data show that about 85 per cent of the standard 500 component companies make a higher-than-anticipated profit in one quarter, the highest rate since 2021. The analysts expect that the profits of these companies will increase by 22 per cent each year in the second quarter, and that the increase is expected to reach 23 per cent throughout the year.
Gold fell, $4000.
In contrast to the stock market, gold fell by about 14 per cent in the second quarter, once to $3942.99 per ounce, the largest single-season drop since 2013. Silver fell by 20 per cent over the same period, with weaker performance.
The market generally attributed the decline in gold to the anticipated changes in the Federal Reserve policy. It was reported that the new Federal Reserve Chairman, Walsh, released a signal of a more hawk than the market expected when it first opened its eyes, and that the market ' s judgement about the interest rate path was adjusted accordingly. As an interest-free asset, gold is under increased pressure in a high interest rate environment.
In addition to interest rate factors, the strengthening of the United States dollar, the outflow of gold ETF funds and the shift of some funds to AI stocks and chip shares have also contributed to the decline in gold prices. According to the World Gold Association, there is a net outflow of gold in June or for the second consecutive month.
Volatility or still high in the second half
Despite strong performance in the second quarter, the market was not easy for the second half of the year. High valuations, up-interest rate risks, AI's ability to deliver on investment returns and the fallout from the Middle East situation remain major concerns for investors.
Dow Jones Market data show that, since this year, the Standard 500 index has dropped by more than 1 per cent a day in over a quarter of trading days. This means that even if the index is maintained at a high level, the volatility of the disk may continue to increase.
Some agencies remain targeted upwards. Stifel strategist Thomas Carroll has recently increased the target price of the standard 500 to 7800 points, about 4 per cent higher than the latest closing level. However, many marketers also believe that the second half of the year is more likely to advance in a highly volatile environment than to move forward unilaterally.