As the first half of 2023 drew to an end, the tech-heavy Nasdaq 100 Index, closely tracked by the Invesco QQQ Trust QQQ, delivered a spectacular 38.7% rise since the year’s inception until June 20, outshining all its global competitors.
Not far behind, the Nikkei 225 Index revealed an impressive performance, up 29.8% in local currency. However, for US-based investors, the 8% devaluation of the Yen against the dollar, slightly tempered this strong return.
Another noteworthy performance was achieved by the S&P 500 Index, tracked by the SPDR S&P 500 ETF Index SPY, which triumphantly rose by approximately 15%, surpassing its advanced country peers, excluding Japan.
The European Euro Stoxx 50 underperformed the broader US market, gaining 11.9% year to far, as did the MSCI All-Country World Ex-US, a benchmark for global equities’ performance excluding the U.S., which is up 7.6%. The UK FTSE 100 has experienced a stagnant journey thus far this year.
Year-to-date Performance of Major Stock Indices:
U.S. Stock Market Gets Its Payback for 2022 Events
Interestingly, the out-performance of the US stock market in 2023 felt like vengeance for the events of 2022.
Both the Nasdaq 100 and the S&P 500 indices had underperformed their counterparts the previous year, suffering a turbulent collapse as the Federal Reserve delivered its fastest rate-hike cycle in its history.
The Nasdaq 100 fell by 33.7%, while the S&P 500 fell by 20%. On the other hand, the Nikkei 225 fell by only 11%, while the Euro Stoxx 50 by 12.4%.
| Stock Index | 2022 Return | 2023 Return (as of June 20) |
|---|---|---|
| Nasdaq 100 | -33.7% | +38.7% |
| S&P 500 | -19.95% | +14.3% |
| All Country Ex-US | -18.6% | +7.4% |
| Euro Stoxx 50 | -12.4% | +11.5% |
| Nikkei 225 | -10.95% | +30.6% |
| FTSE 100 | -0.7% | +0.2% |
Tech Giants’ Supremacy
The U.S. stock market’s comeback in 2023 was largely due to a phenomenal tech sector rally, fuelled by the strength of AI-driven innovations.
The “Magnificent Seven” are seven tech giant companies that significantly contributed to the rise of the Nasdaq 100 index in 2023.
Surprisingly, these seven equities alone accounted for 76% of the overall Nasdaq’s year-to-date gains.
| Company Name | Return YTD | Contribution To Nasdaq 100 |
|---|---|---|
| NVIDIA Corp. NVDA | 194% | 6.6% |
| Microsoft Corp. MSFT | 40.4% | 5.1% |
| Apple Inc. AAPL | 42.3% | 4.95% |
| Tesla Inc. TSLA | 120% | 3.4% |
| Meta Platforms Inc. META | 133% | 3.3% |
| Amazon Inc. AMZN | 50% | 3.05% |
| Alphabet Inc. GOOG GOOGL | 36% | 3% |
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