Geopolitics isn’t the only risk for US equities

Peter Cardillo from Spartan Capital states that US equities post a strong first half, despite a notable correction in the Nasdaq. Cardillo highlights robust global growth expectations, an improving consumer mood and resilient corporate spending, particularly in technology. He points to powerful AI-driven demand for data centre chips and hyperscale capital expenditure, noting that the Philadelphia Semiconductor Index nearly doubles year-to-date, in his view underscoring the strength of the sector. Energy markets are described as a key swing factor. Cardillo notes that oil records its largest monthly and quarterly losses since the Covid period, and he expects ample global supply and eventual progress on Middle East peace efforts to pressure prices lower, potentially towards US$50–55 per barrel. However, he flags low stockpiles as a possible offset and argues that stubbornly high bond yields and a bearish bond market sentiment pose the greater risk to equities than geopolitics. On the macro front, Cardillo observes that US consumers continue spending despite persistent inflation and higher prices across categories. He expects corporate America not to disappoint in Q2 earnings, helping sustain current market valuations. For gold, he sees current weakness as yield-driven and maintains a year-end target near or above record highs if bond yields reverse lower.