RaeAnn Mitrione, Callan Family Office partner, tells Worldwide Exchange tech and chips, led by AI, are powering markets. Mega-cap CapEx and early AI adoption boost productivity despite some slowdown signs.

Technology and semiconductor stocks have played a significant role in driving market gains since the lows seen in April. Companies such as NVIDIA and AMD, along with other mega-cap tech firms, have provided a strong tailwind for the broader market, supported by robust earnings and substantial capital expenditures. 

While there are signs of economic slowdown, especially in the labor market, the tech sector remains resilient, with productivity improvements and early-stage AI adoption contributing to positive outlooks. Earnings growth has been concentrated among a handful of large companies, but overall expectations have been exceeded, and ongoing investment in technology is expected to further support economic growth.

Mitrione: Since April lows, tech and chips have driven the market

the chip state of play is just one that's a huge focus given its significance in that technology trade overall. Just how important is that tech trade. And is it going to be reliant on computer chips and AMD and NVIDIA especially with NVIDIA earnings coming up later on this month. Good morning. The chips no no doubt are a big part of the market move that we've been seeing recently. I mean since since the April lows it's really been technology driving the market. And a lot of that has been chips and NVIDIA specifically and really all the mega caps. And this trade has really been a huge tailwind for the markets. And so making sure that we're making progress and moving in a positive direction. Any any volatility around this any difficulty with China we will see more volatility in those names. But I still think that there is a good tailwind for this sector. The tailwind for the sector is also reliant on macro factors as well. Aside from just the trade and tariff policy discussion how much has the economic data that you've been seeing reinforced the idea that perhaps we are either in a slowdown that's brewing or are perhaps not going to see a slowdown anytime soon. And how much is that and how much of that is important for that tech trade. There is some slowdown. It's hard to ignore that there has been some softness in some of the reports we've been seeing coming out. I mean the labor market specifically most recently and in some other areas as well. But as far as the mega cap tech trade goes I mean those companies are in a strong position. They're generating incredible cash flow. They're spending incredible amounts of capex. I mean ninety five billion is what we saw in the second quarter with a lot more in the pipeline. And that will be a huge tailwind for supporting the economy and economic growth going forward as well. The earnings season has shaped up better than some people had expected. Better than consensus overall. But it has been. And this is like a broken record. It has been a certain handful of stocks that have been driving the vast vast majority of earnings growth within the S&P 500. Is that still a healthy dynamic. It has been for the better part of maybe 15 years. But that broadening out trade is one that maybe some folks say needs to start happening sometime soon. That's a fair point. There is an incredible amount of concentration and we have seen the largest companies really driving a lot of the earnings growth we're seeing even though earnings really have been strong across the board. We've seen really good strength and expectations you know have come have were far below where we've seen the season actually play out. But I do think there was more expectation for broadening out to happen more quickly. But we are seeing productivity improving. We are seeing a I adoption more. We're still in the early stages of that adoption cycle and it's happening quickly. And we do think that's going to have a huge impact on productivity and really help companies to to improve their drive down costs improve their margins. And we'll see that filter down to earnings as well.

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Washington

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Madrid

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Brussels

Ukraine Invasion

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Alaska

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Jerusalem

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Clairton

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Milwaukee

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San Luis Obispo

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Breakdown