Analysis of the 2024 US stock market trend: Seize the investment opportunity in the technology stock wave

The US stock market started 2024 strongly, but hidden risks lurk in the second half. In March, the US stock market once again hit a new all-time high, a phenomenon that stands out amid high macroeconomic uncertainty. From November last year to March this year, the NYSE and Nasdaq indices experienced a rare sustained rise, attracting global investors to enter the market.

What is the core driving force behind this wave of market performance? Easing inflation pressures have restored investor confidence. In 2023, the price index fell sharply, leading to continuous inflows into the US stock market to hedge against asset devaluation risks. However, it is important to be cautious, as the US faces multiple uncertainties in 2024, including the presidential election and escalating immigration issues, which could impact the market in the latter half of the year.

What are the key driving factors of the la bolsa americana

The reason why US stocks can maintain their global appeal depends on several core economic variables:

The strength of the US dollar is the first hurdle. A strong dollar benefits domestic stocks, but excessive appreciation can weaken export competitiveness, thereby dragging down corporate profits. Currently, the dollar has retreated from post-pandemic highs to a relatively balanced range, which is a positive signal for stock investors.

Domestic political stability directly affects corporate outlooks. An election year usually increases market volatility, especially given the significant policy differences between Biden and Trump, which may lead to policy uncertainty premiums. US companies need policy stability to formulate medium- and long-term investment plans.

Technology stocks have reached record highs, with AI becoming the new trend indicator. Over 50% of Nasdaq companies are related to cloud computing and artificial intelligence, meaning that technological innovation progress directly determines market direction. Giants like Apple, Microsoft, Nvidia, and Meta are almost barometers of the US stock market.

The transmission effect of global economic prosperity. Unlike Europe or Japan, which mainly represent their local economies, US stocks are the ultimate destination for global capital flows, and their volatility often reflects the true temperature of the world economy.

Five tech stocks to watch in 2024

Nvidia (NVDA): The undisputed king of AI chips

Nvidia has become a critical player in the AI industry chain. Whether it’s ChatGPT, Midjourney, or other large models, they all rely on Nvidia GPUs for computing power. Since January this year, NVDA’s stock price has repeatedly hit new highs, despite a technical correction in March, its monopoly position in AI chips remains unshaken.

The investment logic is simple: investors optimistic about the AI industry’s prospects should consider investing directly in Nvidia, which supplies the tools rather than chasing numerous AI applications. There is even a saying in the market—investing in Nvidia is equivalent to investing in the entire AI wave.

Microsoft (MSFT): The biggest beneficiary of OpenAI

Microsoft has gained priority development rights for GPT-3 and GPT-4 through deep integration with OpenAI, which provided strong momentum for its stock price in 2023. However, it is important to note that the future independence of OpenAI may weaken Microsoft’s monopoly advantage.

Nevertheless, progress in enterprise cloud computing and integrating AI features into productivity tools continues to be promising. From the beginning of the year to March, MSFT repeatedly hit new highs, but investors should keep expectations in check: if in the second half of the year OpenAI establishes closer collaborations with other tech giants, Microsoft’s growth may slow down.

Alphabet (GOOG): The comeback battle has just begun

When ChatGPT emerged last year, Google nearly faced a strategic crisis. Its AI product Bard initially performed poorly, raising doubts about the search engine giant’s innovation ability. This year, Google launched the Gemini large model, with performance metrics approaching GPT-4.

Alphabet’s counterattack plan includes deep integration of Gemini into Google Search and Google Home platforms. However, risks also exist—recent months have seen increased complaints about declining quality of Google search results, which could affect user trust. GOOG’s stock price has recovered to the high levels of November 2022, but its upward momentum is less aggressive than Nvidia’s.

Amazon (AMZN): An undervalued cloud computing giant

Compared to peers’ hype around AI, Amazon appears more low-key. But this is precisely where the investment opportunity lies—AWS cloud infrastructure has become the underlying support for global AI applications, with many startups and large companies training and deploying AI models on AWS.

Amazon benefits from both e-commerce and cloud computing sectors amid economic recovery and the AI wave, and its logistics network advantages are unmatched. In March, AMZN approached its all-time high but did not break through, which suggests room for further upside. Rather than viewing Amazon solely as an AI concept stock, it’s better to see it as a provider of AI infrastructure tools.

Bank of America (BAC): Benefiting from economic recovery and rate cuts

In an era of tech stocks performing spectacularly, don’t forget the value of traditional financial institutions. As a systemically important financial institution, Bank of America’s performance is closely linked to macroeconomic conditions. With the Fed’s expected rate cuts in 2024, the risk of narrowing net interest margins has eased.

More importantly, although the US economy faces uncertainties due to the election year, overall growth momentum remains. This provides fertile ground for profits growth for large banks like BAC. From the beginning of the year to March, BAC maintained a moderate upward trend, with relatively manageable risks, making it a defensive asset in a portfolio.

Cautiously watch for potential risks in the second half of the year

Although the la bolsa americana is currently on a strong upward trajectory, investors should not be fooled by superficial prosperity. Presidential debates, policy disagreements, and geopolitical conflicts could all disrupt the market in the fall and winter. While the Fed has rate cut expectations, if inflation rebounds or employment data weakens, policy stances could change abruptly.

Variables such as the US dollar exchange rate, global supply chain stability, and the commercialization progress of the AI industry all require ongoing monitoring. For investors seeking opportunities in the la bolsa americana, reassessing the investment portfolio mid-year is essential. While tech stocks have huge growth potential, their risk concentration also increases; allocating some defensive assets is a wise move.