August saw sustained momentum in the markets: major indices, including the S&P 500 and Nasdaq, continued to climb, driven by generally strong US corporate earnings. Over 80% of S&P 500 companies exceeded earnings expectations. US GDP growth for the second quarter surprised on the upside (+3.3%), confirming the resilience of the US economy. This environment has reinforced positive market sentiment, contributed to reduced volatility, and increased investor confidence.
Despite these strong figures, some technology stocks experienced profit-taking. Although results were solid, market expectations were exceptionally high and not always fully met.
Looking ahead, we remain constructive on large-cap technology, digital, industrials, financials, and small-caps. The shift towards artificial intelligence and digitalisation continues to support growth and profitability among sector leaders—even as some of the most prominent names saw short-term adjustments linked to high expectations. We believe the potential of generative AI and the wider rollout of the cloud will continue to drive sector growth and open opportunities in other domains.
We remain alert to seasonal volatility—September has historically been weaker—but incoming signals of monetary easing from the Fed reinforce our current positioning. Of note, much of the expected September weakness has already started to play out in advance, with a correction observed during the last week of August as many investors repositioned early for this seasonal episode. By contrast, we maintain a very cautious stance on the European Union: political instability persists, especially in France, where repeated government crises and the ongoing threat of a no-confidence motion are fuelling uncertainty. This environment continues to weigh on investor confidence and increases volatility in European markets.
