Markets Climb as AI Optimism Meets Higher Rates
The S&P 500 returned 1.2%, unperturbed by rising global interest rates. A renewed rally in semiconductor stocks drove the NASDAQ to an all-time high mid-week; markets remained optimistic around renewed talks in the Middle East and the U.S.-China summit for potential breakthroughs on either front. Mid-cap stocks (0.0%) and small-cap stocks (-0.8%) continue to fare worse than large caps. Within the S&P 500, technology (+3.1%) and communication services (+2.2%) were the best-performing sectors; rate-sensitive utilities (-3.1%) and energy (-3.0%) were the worst-performing. EAFE markets returned +0.2% with small gains across major geographies, while EM markets returned +1.3%, driven by technology-related gains in Korea offset by losses in Brazil (-1.7%), India (-1.0%) and China (-0.6%).