The leading indices in the United States closed the second quarter of the year with sharp surges, as the Nasdaq index soared by 21.4% and the S&P 500 index added 14.9% to its value. This is the most successful quarter for both indices since 2020.

The Dow Jones index also recorded its best quarter since 2022 with an increase of about 13%, and even closed the final trading day of June at an all–time high.

The sharp positive movement in the markets was recorded despite a volatile June, during which the S&P 500 and Nasdaq indices recorded monthly declines, and despite a series of intense headwinds. The markets managed to overcome concerns over the continuing war between the United States and Iran, which initially raised energy and oil prices and dragged worries regarding inflation and interest rate hikes.

In recent weeks, cautious optimism was recorded around contacts for a continuous ceasefire, after a memorandum of understanding was signed between the countries on June 17, although exchanges of fire over the past weekend continued to test the stability of the agreement. At the same time, crude oil prices plummeted last quarter by more than 30% and returned to levels prior to the outbreak of the conflict.

Those who led the historic surges and stood at the center of the activity are the semiconductor stocks benefiting from the AI boom. During the quarter, Micron Technology stock recorded a phenomenal surge of 242%, AMD stock jumped by 186%, Broadcom added 22% and Nvidia rose by 15%. The Philadelphia Semiconductor Index (PHLX) recorded a quarterly surge of 88% – the best quarter it has ever had.

Alongside the optimism and analysts' forecasts for growth of more than 20% in corporate profits in the second quarter and the entire year, investors are still tracking with concern the high valuations in the market. The new Federal Reserve Chairman, Kevin Warsh, recently surprised the markets when he expressed deep concern over inflation, whose core index reached 4.1% – far from the central bank's 2% target.

Now, traders are pricing in at least one more Fed interest rate hike by the end of 2026. Due to these concerns, sharp declines were recorded last quarter in precious metals, as gold recorded a quarterly decline of 13% – its worst since 2013, and the price of silver plummeted by 20%.