U.S. stock market today: A golden opportunity for investors?

If you are looking for a place to “invest money” with high yields, the US stock market is definitely worth considering. With a market capitalization of up to $46.5 trillion, it is no coincidence that it is the largest market globally, accounting for 75% of the world’s total market value.

Why are US stocks so “hot”?

Every year, millions of investors pour money into this market. Why? Simply because its performance is not “sleep-inducing.”

Taking the last 5 years as an example:

• S&P 500 increased 85.78%
• Dow Jones increased 54.13%
• Nasdaq 100 increased 147.43% (amazing, right?)

Tech stocks are even more “driven”:

• Apple (AAPL): +261.33%
• Microsoft (MSFT): +256.33%
• NVIDIA (NVDA): +1,908.58% (this is real, not a typo)

These figures are enough to make anyone look up in admiration.

The four “king” indices you need to know

When it comes to US stocks, you can’t ignore these four major indices. Each represents a different aspect of the US economy:

Dow Jones (DJIA) – “The so-called legend”

Founded in 1896 by Charles Dow to evaluate leading industrial companies. It includes only 30 of the largest companies, accounting for about 25% of the US market capitalization. Perhaps because of its small number, this index is more “sensitive” – easily affected by geopolitical events, Fed interest rate decisions, even wars or pandemics.

S&P 500 – “The balancing machine”

Developed since 1957, it tracks 500 large publicly traded companies on NYSE or NASDAQ. Market cap: $43.9 billion. Notably, the S&P 500 accounts for up to 70% of the total US stock market value, making it the best “representative” of the country’s economic health. It reflects all sectors: technology, healthcare, energy, retail.

However, a frustrating aspect is that 50% of this index’s value is determined by the 45 largest constituent companies. This means if Apple or Microsoft “fall,” the entire index will be dragged down.

Nasdaq Composite – “The tech paradise”

Founded in 1971, it is the exchange with the most tech and startup companies. Market cap: $35.48 billion. Unlike Dow or S&P 500, Nasdaq Composite includes smaller “outlier” companies, making this index more volatile. It reflects investor sentiment towards “speculative” stocks.

Nasdaq 100 – “The minimalist sibling of Nasdaq”

Established in 1985, it includes only the 100 largest companies on Nasdaq, with a market cap of $18.24 billion. Considered a simplified version of Nasdaq Composite, Nasdaq 100 focuses on sectors like Technology, Telecommunications, Biotech, and Media.

Where are US stocks today?

As of March-April 2024:

• Dow Jones: 44,284.8 (up 5.59% in the first 3 months of the year)
• S&P 500: 6,045.6 (up nearly 10% year-to-date)
• Nasdaq Composite: 18,210
• Nasdaq 100: 21,426.8 (up 24.17% over 6 months)

What’s the story here? After major volatility in 2022-2023 (energy crisis, Russia-Ukraine war, global inflation), the market is recovering. The brightest spot is Nasdaq 100, driven by expectations that the Fed will cut interest rates.

Notable stocks in 2024

Not all stocks “climb” like NVIDIA. But some names truly “stand out”:

• SWAV (Shockwave Medical): +828.8%
• VKTX (Viking Therapeutics): +795.13%
• LWAY (Lifeway Foods): +787%
• ZJYL (Jin Medical International): +750%
• SMID (Smith-Midland): +491.89%
• PRAX (Praxis Precision Medicines): +394.39%

These are small to mid-cap stocks, not giants like Apple or Microsoft, but their performance is “shocking.”

How to trade if you’re in Vietnam?

The most burning question: Can Vietnamese people directly buy US stocks?

Answer: Almost impossible. Vietnamese law currently does not allow individual investors to directly own US securities.

But is there a solution? Yes – margin trading via CFD (Contract for Difference). This method allows you to:

• Profit from price differences without owning actual stocks
• Bet on rising (bullish) or falling (bearish) markets
• Use leverage to maximize profits (but also increase risks)

Where will the market go?

According to Goldman Sachs, one of the largest investment banks:

• The Fed will cut interest rates 3 times in 2024 and 4 times in 2025
• Long-term rates will stabilize at 3.25-3.5%

This news has stimulated the market. Investors expect that lower interest rates = cheaper borrowing costs = higher corporate profits.

But there are risks not to overlook:

• Russia-Ukraine war and Israel-Hamas conflict continue. If escalation occurs, investors will flock to “safe-haven assets” like gold or Bitcoin, causing stocks to sell off.
• According to investor David Bahnsen, if Middle East conflicts intensify, the stock market could decline 7-10%.

Where to start?

If you’re interested, remember:

1. Understand each index – Dow Jones, S&P 500, Nasdaq represent different aspects
2. Follow statistics – Price, market cap, 5-year performance are key data
3. Manage risks – Never put all eggs in one basket
4. Choose reputable platforms – If using CFDs, select brokers regulated by reputable financial authorities

The US stock market today shows signs of optimism. But remember: high profits never come without high risks. Invest wisely.