US stock markets opened with a mixed performance on Tuesday evening, Beijing time. Wall Street is set to close out a robust first half and second quarter, with the Dow Jones Industrial Average on track for its best first-half performance in five years, while the Nasdaq Composite is poised to record its largest quarterly gain since 2020.
The Dow Jones Industrial Average rose 40.94 points, or 0.08%, to 52,223.68. The Nasdaq Composite fell 5.87 points, or 0.02%, to 25,814.28. The S&P 500 index gained 2.18 points, or 0.03%, to 7,442.61.
Stocks rallied across the board on Monday, with a US-Iran ceasefire boosting market sentiment. The S&P 500 index advanced 1.18%, and the Nasdaq Composite climbed 2.07%.
Markets continue to monitor developments in US-Iran relations. On Sunday, the United States and Iran provisionally agreed to halt attacks on each other and allow commercial vessels to pass through the critical Strait of Hormuz shipping lane. A US official stated on Sunday that "both sides will observe a temporary ceasefire, and ships can pass freely."
In a report on Tuesday morning, UBS strategists noted that despite the optimistic start to the week, concerns persist regarding the sustainability of capital expenditure growth in artificial intelligence.
They wrote, "We believe allocation to AI-related stocks will be a key differentiator for long-term equity market performance, but we also think it is crucial to diversify both within and outside the AI space. This suggests investors can consider more defensive areas within the AI sector, such as data center operators and certain payment companies, as well as other structural trends."
Tuesday marks the final trading day of the first half and the second quarter.
The Dow has gained 8.6% in the first six months of the year, on pace for its best first-half performance since 2021, when the index rose 12.7%. The S&P 500 is also up more than 8% for the first half, while the Nasdaq has performed even more strongly, rising 11.1%. Additionally, the Russell 2000 index has surged over 21%, on track for its best first-half performance since the first half of 1991.
The year began with significant market volatility. Although major indices have repeatedly hit record highs, this has occurred against a backdrop of wild swings in energy prices due to the Iran conflict and uncertainty surrounding the sustainability of AI spending.
However, the second quarter of this year has seen particularly strong stock market performance, as concerns about the AI trade have eased and the war appears to be nearing an end.
The S&P 500 and Nasdaq are up approximately 14% and 19.6% for the second quarter, respectively, positioning them for their largest quarterly gains since the second quarter of 2020. The Dow has risen 12.6% over the same period, on course for its strongest quarterly performance since the fourth quarter of 2022.
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