Highlights: We remain overweight on US equities, supported by resilient growth, strong earnings momentum and continued US leadership in artificial intelligence, semiconductors, cloud infrastructure and software. US equity gains have broadened in 2026, though July brought a meaningful rotation across sectors and within the Technology sector. Valuations have now become more balanced, and earnings growth is expected to remain strong and broaden beyond the largest technology companies during the second half of this year.

• US equities have delivered broad gains in 2026. As of 10th August, the S&P 500 is up 13.3 per cent YTD, the Nasdaq 14.5 per cent, the Dow Jones 12.3 per cent, and the Russell 2000 21.6 per cent. The Forgotten 493 gained 15.4 per cent, compared with 4.8 per cent for the Magnificent 7
• The US equities have outperformed other developed markets YTD, but emerging markets remain ahead, supported by the exceptional gains in South Korea and Taiwan
• July brought a clear change in leadership. The S&P 500 remained nearly flat, but seven of eleven sectors advanced. Energy gained 12.5 per cent and Financials rose 6.0 per cent, while Technology fell -3.5 per cent
• Technology experienced a sharp internal rotation during July. Systems software gained 17.9 per cent, while semiconductors declined -8.5 per cent and semiconductor equipment fell -32.5 per cent
• Technology’s forward P/E premium to the S&P 500 has narrowed from 10.7x at the start of 2026 to roughly 4.8x at the time of writing. Valuations nevertheless remain elevated in select industries, particularly semiconductor equipment
• The earnings outlook remains supportive. FactSet expects S&P 500 earnings growth of 27.4 per cent in Q3, 25.2 per cent in Q4, 30.0 per cent for full-year 2026 and 13.6 per cent for 2027, with Technology retaining a substantial earnings-growth advantage