The major US indices have recorded strong gains for the first half of 2017 and continue to trade within a few percentage points of record levels. Over the month, the Dow Jones and the S&P 500 recorded gains of around 0.62% while the NASDAQ fell 2.40% as concerns grow over the valuation of technology shares.
Technology shares represent around 23% of the S&P 500 and the recent increase in volatility will continue to have an influence on the broad-market benchmark. As investors continue to see large cap technology stocks as overvalued, the major indices will remain vulnerable. However, there is some evidence of a rotation into value stocks.
Wall Street has generally gone higher since President Trump’s election victory in anticipation of an agenda to support economic growth and corporate profits. The administration, however, has seen few legislative successes and the recent delayed vote on healthcare has added to nervousness over current market levels.
June saw a hike in interest rates and the account of the Federal Open Market Committee’s discussion is due to be released shortly. Another consideration for investors is that the period July to October is traditionally quiet in equity markets.
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