US interest rates are expected to remain elevated for an extended period

North American equity markets continue their upward trajectory as giant tech companies post earnings that surpass expectations, further justifying the ongoing rise in price-to-earnings multiples. The S&P 500 has risen by almost 6%, and the Nasdaq has added 5.2% year-to-date.

The so-called "magnificent seven" stocks, including Apple, Microsoft, Nvidia, Amazon, Netflix, Alphabet, Tesla, and Meta, continue to drive the market, despite some sluggishness from names such as Apple and Tesla, which reported disappointing results. Nevertheless, investors continue to demonstrate unwavering confidence in these companies.

Apple reported its slowest iPhone sales in China, while Tesla experienced lower-than-expected car deliveries for the first time. However, Elon Musk managed to rally market enthusiasm with a speech, leading to a 20% surge in stock price over two days. Nonetheless, the stock remains down by 30% in 2024.

During its Wednesday meeting, the US central bank opted to keep interest rates unchanged, citing the need for more time and evidence before considering rate cuts. This decision has further strengthened the US dollar. Initially, markets had anticipated three rate cuts of 0.25% each throughout 2024, but current projections suggest that rate adjustments may commence closer to the end of the year.