Our top 3 gainers and laggards over the past month amid tariff and Mideast uncertainty

The U.S. stock market advanced significantly over the past month, with the S&P 500 up 4.2% and Nasdaq up 5.5%, largely shrugging off geopolitical and trade uncertainties including looming tariff deadlines and the Israel-Iran conflict, though oil prices experienced volatility. This market resilience was primarily driven by robust investor demand for generative AI-related stocks, propelling names like Broadcom, GE Vernova, and Nvidia higher, while traditional retailers such as TJX and Home Depot, along with Salesforce, underperformed due to sector rotation and specific operational challenges.

Analysis

The U.S. stock market has shown remarkable resilience over the past month, with the S&P 500 and Nasdaq advancing 4.2% and 5.5% respectively, despite significant geopolitical and trade-related uncertainty. This rally has been narrowly driven by a powerful thematic rotation into generative artificial intelligence, which has propelled AI-related stocks to new highs while other sectors lag. Key performers include Nvidia (NVDA), up 12.2% after a stellar earnings report dispelled fears of an AI spending slowdown, Broadcom (AVGO), up 14.8% on optimism about its custom chip business, and GE Vernova (GEV), up 12.8% due to its strategic position in providing power for data centers. Conversely, this focused buying has led to underperformance in other areas; discount retailer TJX Companies (TJX) fell 4.9% as investors shifted to growth tech, and Home Depot (HD) dropped 2.8%, weighed down by both the rotation and a five-year low in housing starts. Salesforce (CRM) also struggled, declining 3.9% amid investor concerns over its growth metrics and a costly $8 billion acquisition of Informatica. The market has largely ignored risks such as a looming July 9 tariff deadline with the EU and a recent, albeit now ceased, military conflict between Israel and Iran, which caused significant short-term volatility in oil prices.

Key Decisions for Investors

• Investors should recognize the powerful, concentrated rally in AI stocks and consider managing risk by trimming highly appreciated positions, as exemplified by the portfolio's recent profit-taking in Broadcom.
• Evaluate laggards like Home Depot and Salesforce based on a longer-term thesis, weighing the potential for a housing market rebound against concerns over corporate acquisition strategy and execution.
• Remain vigilant of geopolitical and trade-related catalysts, such as the upcoming July 9 tariff deadline and Middle East stability, which could abruptly shift market sentiment and impact cyclical sectors and energy prices.