US stock market sees its best performance in July since 1997

After 1997, the US stock market had its best performance in July, reported CNN.

The American media outlet reported that the benchmark S&P 500 index closed July with a 21% boost this year. Citing the S&P Dow Jones Indices data, CNN said that such a gain was last seen 26 years ago.

Apart from this, the S&P 500 along with the Nasdaq Composite registered its fifth winning month in a row. It was the longest monthly winning streak since 2021.

However, the rally hit a snag on the first trading day of August, with stocks wavering as investors parsed the week’s mixed bag of second-quarter earnings.

However, CNN said August sees lower trading volumes and the stock exchange is volatile due to the summer travel season.

The media outlet said that the stock market rallied this year largely due to the Magnificent Seven, a group of stocks. The stocks are those that have simultaneous defensive and growth qualities as well as their roles in developing artificial intelligence products. Tech giants Nvidia, Apple, Amazon, Alphabet, Meta Platforms, Microsoft and Tesla fall in this group.

The better-than-feared earnings season has also helped lift stocks.

Refinitiv Lipper’s data showed that close to 81% of the 292 companies, listed in the S&P 500, second-quarter results were much better than what analysts were foreseeing.

Nvidia has risen by 220% this year, Meta Platforms went up 165%, Carnival gained 134%, Royal Caribbean added 121% and Tesla increased 117%.

CNN reported that the rally has broadened in recent months, as Wall Street sees inflation cooling, the economy avoiding recession rumours and the Federal Reserve ending its rate-hiking cycle.

The S&P 600 index, which tracks the performance of stocks of small companies, outperformed the broader index last month.

However, CNN said that the gains were not equal across the board. An equal-weighted version of the S&P 500 underperformed year to date through July.