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Highlights
- Microsoft (NASDAQ:MSFT) posts its best-ever quarterly results
- Meta (NASDAQ:META) also beats expectations, lifting market sentiment
- Despite recent gains, markets remain below their previous highs
Despite mixed economic data from the US, the technology sector continues to stand out. The latest inflation print showed a cooling to 2.29%, but GDP growth decelerated to an annualised 0.30%—an early sign that trade tariffs may be impacting economic momentum. This initially led to a 2% decline in the S&P 500 before a recovery brought the index back to finish flat.
After the market closed, Microsoft (NASDAQ:MSFT) delivered a stellar earnings report, registering a 13% year-on-year increase in sales and an 18% rise in profit—its best quarterly result to date. The stock surged 8% in after-hours trading. Not far behind, Meta Platforms (NASDAQ:META) also outperformed analyst expectations, leading to a 5% rise in its share price in the post-market session.
This upbeat tech performance follows a local trend of positive trading days, with the technology sector recently leading gains in Australia. Yet, even with recent momentum, broad markets remain off their previous peaks. For instance, the Vanguard Australian Shares Index ETF (ASX:VAS) once peaked at $106.39 but currently trades at $100.50. Including its latest distribution of $0.727, the ETF is still down by approximately 4.84%. Similarly, the iShares S&P 500 ETF (ASX:IVV) is down 11.60% from its peak, despite a small distribution during that time.
Investors tracking benchmark indices like the ASX200 may wonder whether the recovery has truly taken hold. While some optimism is justified, many portfolios are still navigating a path back to previous highs.
A crucial takeaway is that not all downturns are immediately visible. The absence of sharp daily declines doesn’t mean assets have fully rebounded. Additionally, well-diversified portfolios—incorporating assets like cash and bonds—tend to experience smaller drawdowns than headline equity indices.
To navigate this landscape, it helps to take cues from superannuation strategies: diversify across asset classes, keep costs low, adopt a long-term view, and contribute regularly. These principles reduce emotional investing pitfalls and support steady, compounded growth over time.
For those looking for more stable income-oriented opportunities during this period of partial recovery, exploring ASX dividend stocks may offer a balanced approach within an equity strategy.
