US Equities: The US stock market, popularly known as Wall Street, continues to extend its bull run, supported by strong corporate earnings and resilient economic data. The benchmark indices ended June on a strong note, with the S&P 500 and Nasdaq posting their biggest quarterly gains since 2020.
The Dow Jones Industrial Average rose 136 points, or 0.3 per cent, to close at 52,319.20. The S&P 500 gained 0.8 per cent to settle at 7,499.36, while the Nasdaq Composite surged more than 1.5 per cent to finish at 26,213.72. All three major indices are trading close to their respective 52-week highs, underscoring the strength of the ongoing rally in US equities.
Despite the sustained bullish momentum on Wall Street, the markets continue to navigate a mix of supportive tailwinds and lingering headwinds.
Strong earnings underpin market gains
On the earnings front, the US market has delivered a robust first-quarter earnings season, and investors are now turning their attention to second-quarter results.
He added that earnings growth is expected to remain above 20 per cent in the second quarter and continue at similar levels in the third quarter, with full-year earnings-per-share (EPS) growth also projected to exceed 20 per cent.
“Overall, we’re going to end the year with +20 per cent EPS growth,” Rao said.
The strong performance of US equities has largely been driven by better-than-expected corporate results, which have helped offset several headwinds faced by the market over the past few months.
Resilient labour market boosts sentiment
A resilient labour market in the world’s largest economy has also provided a significant boost to investor sentiment.
In May 2026, US nonfarm payrolls increased by 172,000, while the unemployment rate held steady at 4.3 per cent. Job openings remain elevated, and layoffs were limited, indicating a healthy labour market despite signs of gradual cooling.
Strong employment data supports equities by underpinning consumer spending, improving the outlook for corporate earnings and strengthening investor confidence in the broader economy.
Inflation risks remain on investors’ radar
Analysts believe inflation risks persist and expect at least one interest rate hike in 2026 to manage potential price pressures, particularly after geopolitical tensions in the Middle East pushed energy prices higher.
Despite these concerns, Rao believes inflation is not currently posing a major risk to the equity market.
“Inflation is proving to be very sticky, and that’s going to stay there… It’s not jumping up, but it’s not coming down either. It’s kind of sticking there, so it’s manageable (for US equities),” he said.
Focus shifts to upcoming economic data
Going forward, investors are likely to closely monitor upcoming US economic data, particularly inflation and labour market indicators, as they could provide further direction for Wall Street and shape expectations around the Federal Reserve’s policy path.
Bottom Line
Wall Street’s bull run remains firmly intact, underpinned by robust corporate earnings and a resilient US economy. However, sticky inflation, Middle East-driven energy risks and uncertainty over the Federal Reserve’s next move mean upcoming economic data will be crucial in determining whether the rally can sustain its momentum.
