AI’s Impact on the Markets, Q2 Reflections, & 5 Things Every Portfolio Should Have

The Money Wise guys are back in the studio and kicking off this week’s episode with an update on the financial markets for the week, year-to-date, and the second quarter of 2024. For the past week, the Dow Jones Industrial Average was down about 0.2%, the S&P 500 was up 0.1%, and the NASDAQ led the pack, rising 0.7%. Looking at the year-to-date performance, the Dow Jones Industrial Average is up 3.7%, the S&P 500 has increased by 14.7%, and the NASDAQ is up 18.7%. For the second quarter of 2024, the Dow Jones saw a decline of 1.73%, while the S&P 500 grew by 3.92%, and the NASDAQ once again led with an impressive 8.26% increase. The guys highlight the significant contribution of tech and AI-related stocks to the S&P 500’s performance, noting that NVIDIA alone accounted for more than 30% of the S&P 500’s return year-to-date. They also emphasize the importance of a balanced portfolio and mention that despite NVIDIA’s 150% rise and Microsoft’s 19.97% increase, Apple has lagged with a 10.6% gain.

The discussion moves on to the concentration of returns in a few key stocks, similar to the "magnificent seven" in 2023. This year, companies like Google, Amazon, Meta, NVIDIA, and Microsoft are driving returns, especially those involved in AI hardware. The Money Wise guys mention recent portfolio adjustments, including taking profits from AI hardware stocks like NVIDIA and Broadcom, and reallocating towards AI software companies such as Salesforce and ServiceNow, which have shown negative performance year-to-date, offering attractive valuations for long-term investments. As the market enters the second half of 2024, they question whether there will be a broader market participation beyond the few leading stocks, which have been trading below their moving averages. 

AI’s Impact on the Markets

AI has significantly impacted the markets by driving substantial growth, particularly in the technology sector. Companies involved in AI development, such as NVIDIA, have seen remarkable stock price increases, contributing disproportionately to the overall market performance. This concentration of returns has made tech and AI stocks key drivers of major indexes like the S&P 500. As investors recognize the transformative potential of AI, both hardware and software companies in this space have attracted significant attention and investment, highlighting AI’s critical role in shaping market trends and influencing investment strategies.

In the second hour today, the Money Wise guys share 5 Things Every Portfolio Should Have. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.