Where Stock Market Is Headed After Wild First Half: Five Charts

As a dizzying first half for US stocks draws to a close, the Nasdaq 100 Index is poised for its best opening six months to a year ever, and Wall Street is growing concerned that the Federal Reserve will derail the rally.

Optimism that the US central bank is approaching the end of its tightening campaign helped transform the technology-heavy gauge from 2022’s market underachiever to 2023’s early champion, with a surge of 36% erasing last year’s 33% slump.

The resurgence has defied skeptics, coming in the face of bank failures, recession fears, and the highest borrowing costs since 2007. But investors stuck with stocks amid signs that the US economy remains resilient and the earnings outlook appears to be improving.

Historically, a robust first half in the stock market is a good omen for the rest of the year. But Wall Street strategists are leery, warning that the rally in tech stocks looks overblown, with rich valuations and just a handful of high-flyers like Apple Inc., Microsoft Corp., and Nvidia Corp. providing the strength. Stocks are coming off the boil a bit, with the S&P 500 Index just posting its worst week since March.

Impressive Run | The Nasdaq 100 Index is on track for the best first half ever