We are halfway through the year and the stock market continues to rise. The S&P 500 and Nasdaq hit new highs on Wednesday. This has brought the S&P 500 index up 12.93% year to date. The market has been driven by a boom in technology stocks and artificial intelligence, but it’s uncertain whether it will continue to hit new highs or even fall through the rest of the year. Some say the Fed may be forced to delay cutting interest rates if inflation rises. “There are a number of underlying issues that could trigger financial market volatility in the coming months,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “We believe the likely main volatility trigger remains the possibility of a rate cut by the Federal Reserve. The timing.” He added that election “surprises” could also be another trigger for a stock market correction. Wren said Wells Fargo’s guidance emphasizes rebalancing in equities. “We believe technology-related stocks are vulnerable to longer-term interest rate uncertainty, while inflation remains a variable,” he said, adding that he likes sectors with “lower-than-tech valuations” and long-term growth potential. Examples include industry, energy and healthcare. British asset manager Schroders added that stocks other than major technology companies may start to perform better. “We expect the gap between ‘Magnificent 7’ stocks and the rest of the world to narrow in 2024,” said Jason Yu, the firm’s head of multi-asset management (Asia). CNBC Pro uses FactSet to screen the S&P 500 and MSCI World Index, to find out which stocks have outperformed the market this year but could still lead in the second half of the year and beyond. Here are the criteria we use: Up more than 13% so far in 2024. The consensus price target offers upside of 20% or more. These stocks show up.
