Source: Wall Street See

Despite the high interest rates in the United States, the US stocks have repeatedly hit new highs, and the main benchmark index has been rebounding since October last year.

$Nasdaq Composite Index (.IXIC.US)$It has surpassed the 17000-point mark in May and has increased more than 9 times in 20 years.$S&P 500 Index (.SPX.US)$It has risen for 6 out of the past 7 months, and even analysts' forecasts have struggled to keep up with the rise in the US stock market.

At the same time, the surge in US stocks has also raised concerns about whether the US stock market can continue its upward trend in the coming months. Wall Street analysts have shown obvious differences, reflecting the increasing uncertainty of the market's sustainability.

Yahoo Finance's Executive Editor Brian Sozzi believes that technology stocks may not be as healthy as they seem, and popular technology stocks may experience a downward trend this summer. Matejka of JP Morgan believes that the summer rally in the US stock market may be limited, while Wilson, the famous Wall Street bear who turned bullish on the US stock market, still insists on this view.

Yahoo Finance Editor: The sharp rise of the Nasdaq makes me worried, and it will fall back in the summer.

Now the AI revolution is driving a technology boom, driving valuations of companies such as Nvidia, Anthropic, and OpenAI to soar.$NVIDIA (NVDA.US)$The latest AI developments last week showed that some companies are expected to perform better than expected this quarter, partly due to the launch of higher-priced AI PCs in mid-June. Chewy, a pet supplies e-commerce company, did not directly mention AI, but it can be seen that it is starting to drive better sales and profit margins.

However, there are also setbacks in AI development. The poor performance and guidance of Salesforce has surprised people, despite the company's introduction of a series of new AI products, its guidance remains weak.$HP Inc (HPQ.US)$Regarding this, Wall Street industry strategic analyst and Yahoo Finance Executive Editor Brian Sozzi commented that he did not think that the Nasdaq would usher in a summer bear market, but rather that the current situation in the technology industry may not be as healthy as it seems, and popular technology stocks may experience a downward trend this summer. Investors will re-evaluate their valuations.$Chewy (CHWY.US)$Some consumer stocks, such as

Salesforce's poor performance and guidance have surprised people, despite the company's introduction of a series of new AI products, its guidance remains weak.$Salesforce (CRM.US)$As for this, Wall Street industry strategic analyst and Yahoo Finance Executive Editor Brian Sozzi believes that although the Nasdaq is hovering near new highs due to some individual stocks such as Nvidia and Apple, fewer and fewer stocks are able to maintain their position above the 50-day and 200-day moving averages. This dichotomy is also reflected in the performance of specific individual stocks, such as some consumer stocks.

Brian pointed out:

I don’t think the Nasdaq is about to usher in a summer bear market, but rather that the current state of the technology industry may not be as healthy as it seems, and popular technology stocks may experience a downward trend this summer. Investors will re-evaluate their valuations.

Yahoo Finance's Executive Editor Brian Sozzi believes that technology stocks may not be as healthy as they seem, and popular technology stocks may experience a downward trend this summer.

Despite hovering near new highs due to some individual stocks such as Nvidia and Apple, fewer and fewer stocks are able to maintain their position above the 50-day and 200-day moving averages.

This dichotomy is also reflected in the performance of specific individual stocks, such as some consumer stocks.$Dollar Tree (DLTR.US)$ and $Lululemon Athletica (LULU.US)$lagging behind the large cap, some ai-related companies such as$Workday (WDAY.US)$ and $Autodesk (ADSK.US)$also did not perform well.

As Wedbush analyst Dan Ives said, this is a so-called "concentrated uptrend" market, where investors only want to bet on pure AI players such as Nvidia and Apple, and they ignore other tech stocks.

Looking ahead, Keith Lerner, chief market strategist at Truist Advisory Services, said the combination of a rebound in the 10-year Treasury yield from a low of 4.3% to above 4.6% and the approaching of the June election could continue to weigh on non-tech sectors.

Morgan Stanley and JPMorgan hold different views.

Morgan Stanley and JPMorgan hold opposite views, one is bearish and bullish on small-cap stocks, and the other is bullish and bullish on large-cap stocks.

For the future trend of the US stock market, Mislav Matejka, an analyst at JPMorgan's strategy team, said in a report to clients:

We believe that the summer market will be limited, because the market generally expects future deflation, but at the same time believes that the economy will not have a "hard landing" and is optimistic about the acceleration of profits. The inconsistency between these two expectations will limit the upside potential of the market.

Matejka further stated that he expects small-cap stocks to rebound in the second half of the year, but more in the European market than in the United States. The main driving force is that Europe is expected to start a rate cut cycle, and local economic activity may be better than in the United States. For the United States, these favorable factors are not so clear.

In contrast, Morgan Stanley analyst Michael Wilson believes:

His bullish argument still holds, as long as the bond market does not send any tightening signals, the continuously rising government debt will continue to stimulate expenditures, thereby pushing up the prices of assets including stocks.

It is worth mentioning that Wilson is one of the most famous bears on Wall Street. He has always been bearish on the US stock market, but in May he made a 180-degree turn and raised the target for the S&P 500 index by 20%, from 4,500 points to 5,400 points, and his forecast for the index jumped from the lowest on Wall Street to expecting a record high.

Wilson said:

The small rebound in the S&P 500 index after holding the 50-day moving average last Friday is a bullish signal. Considering the rebound, the bullish argument still prevails in the short term, but if the June data continues to be mixed, emotions may turn again.

In addition, Wilson suggested that investors should not chase low-quality stocks with poor fundamentals. Wilson is skeptical about capital flows from technology stocks to consumer stocks and small-cap stocks. He believes that large companies are more attractive from the perspective of risk-return ratio in the next few months.

Editor / jayden