History shows stock market's bullish momentum in the first half could spill over into the second half, but analysts are not so sure

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The U.S. stock market is on track to close out a historically robust first half of the year that will see the technology-heavy Nasdaq Composite post its best...

The U.S. stock market is on track to close out a historically robust first half of the year that will see the technology-heavy Nasdaq Composite post its best opening six-months in four decades.

The rally happened despite numerous downside risks, including the collapse of three U.S. regional banks, the gridlock in Congress over raising the debt ceiling, and forecasts of a recession resulting from interest rate rises by the Federal Reserve to curb elevated inflation. David Sekera, chief U.S. market strategist at Morningstar Research Services LLC, said the stock market in 2023 was the unwinding of some 2022’s headwinds, which included a tightening monetary policy, hot inflation, and a potential economic slowdown.

However, stock-market analysts remained cautious about what the history means for the markets moving forward. Sekera of Morningstar told MarketWatch that from a valuation standpoint, the technology sector has risen into an “overvalued territory” and these megacap technology stocks “have already run their course.”

Shares of Apple AAPL traded 1.8% higher on Friday, putting them on pace to close at levels that would give the company a market capitalization above $3 trillion. Apple’s stock needs to finish above $190.73 for the smartphone giant to hit the mark. It was trading at $192.95 in the afternoon trading.

 

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