US Stock Trend (July 1): Semiconductor Index Up 88% in Q2, S&P and Nasdaq Post Best Single-Quarter Performance Since 2020
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US Stock Trend (July 1): Semiconductor Index Up 88% in Q2, S&P and Nasdaq Post Best Single-Quarter Performance Since 2020
The first week following the quarterly transition is more suitable for validating whether momentum can continue; chasing high momentum is not cost-effective.
Navigating Web3 tides with focused insightsBy: TechFlow Research
On the last day of Q2, employment data remained resilient, coupled with the semiconductor sector's nearly doubled gains continuing year-to-date. Both the S&P 500 and Nasdaq recorded their best quarterly performance since 2020, while the Dow Jones continued to hit record highs during the session.
Market Performance
The S&P 500 closed up 0.79% at 7,499.36 points, down 1.06% for June, and up 14.87% for Q2. The Dow Jones rose 0.26% to 52,319.20 points, up 12.90% for Q2. The Nasdaq gained 1.52% to 26,213.72 points, down 2.81% for June, and up 21.41% for Q2. The Russell 2000 hovered around 3,010 points, up approximately 21% for Q2, marking its best first-half performance since 1991. The signal of small-cap stocks outperforming large-caps was further confirmed at the end of the quarter.
Capital clearly concentrated on AI hardware on the last day of the quarter. The semiconductor index surged nearly 4% in a single day, pushing its Q2 cumulative gain to 88%, making this the strongest quarter on record for the index. Utilities, consumer staples, and real estate were sold off, declining between 1.5% and 2.1%. The funding for this rally came from shifting from defensive positions to growth positions; signs of a broad market rally were not evident.
At the individual stock level, Apple rose 2.7% in a single day, driving the Magnificent Seven to strengthen collectively; memory chip stock SanDisk surged nearly 11% in a single day, ranking first in gains among S&P components; Nike was sold off after earnings release, falling 2.68%.
The bond market tightened simultaneously. The 10-year US Treasury yield closed up 5.72 basis points at 4.4316%, reaching as high as 4.463% during the session; the 2-year yield closed up 4.11 basis points at 4.1455%.
Precious metals diverged. Spot gold fell 0.18% to $4,008.98/oz, down 14.31% for Q2; silver instead rose 0.62% to $58.619/oz. Crude oil continued its decline, with WTI falling 1.77% to $69.50/barrel, down 14.86% for Q2. Crypto assets weakened simultaneously, with Bitcoin falling 2.5%, once dipping near $58,200, and Ethereum falling 2.6%.
Macro and Outlook
The employment market left little room for rate cut expectations. US job openings in May rose to 7.594 million, nearly 300,000 higher than market expectations. The ratio of unemployed persons to job openings was basically one-to-one; the Federal Reserve has been watching this ratio closely to see how tight labor supply and demand actually are.
This Supreme Court ruling significantly impacts the Federal Reserve's independence. The court blocked the White House's move to dismiss Fed Governor Cook with a 5:4 vote result. This means the path for new Chairman Wash to change monetary policy direction by replacing personnel is basically blocked.
Geopolitically, there were no new developments for now. Qatar denied arranging US-Iran Doha-level talks, and Israel launched a new round of raids in the West Bank.
Regarding Nvidia, two diametrically opposite judgments emerged. SemiAnalysis stated on one hand that the Rubin Ultra chip was scaled back three months after launch, with share being eroded by competitors, and on the other hand that the HBM4 supply bottleneck has been resolved, and H2 data center revenue might be 20% higher than market expectations. Bullish and bearish signals appeared in the same report simultaneously.
Tonight's schedule is quite full. The final June manufacturing PMI for five economies—China, US, Europe, Japan, and UK—will be announced sequentially. The US also has ADP employment and EIA crude oil inventory data. Fed Chairman Wash and several central bank governors will also speak publicly. Thursday's US non-farm payrolls is the real highlight. Additionally, liquidity will be thin during the US holiday on July 4. If the Japanese Yen continues to weaken, it cannot be ruled out that Japanese authorities will trigger a surprise intervention, and cross-asset volatility may be amplified in the short term, which is also worth noting.
TechFlow Perspective
The semiconductor index's 88% gain in Q2 has already priced in a significant portion of future expectations. Morgan Stanley strategists comparing it to the silver rally before a misfire is not alarmist. The logic supporting the continuation of the rally is that employment data remains robust and earnings growth has not been fully priced in. The risk lies in the fact that capital rotation signals have already appeared; the sell-off in defensive sectors and real estate, and the outperformance of small-caps relative to large-caps, are all manifestations of the same rotation logic. The first week after the quarter switch is more suitable for verifying whether momentum can continue; chasing high momentum is not cost-effective.
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