Martin Gamble

In a week dominated by two major events – the first Federal Reserve meeting under chair Kevin Warsh and the US-Iran peace deal – US markets made positive progress.

Markets saw a setback this week led by a sharp sell-off in global chip stocks with the Korean Kospi index dropping more than 7% and the Philadelphia semiconductor index, known as the SOX index, falling more than 6% before recovering slightly.

Every El Nino event in the past 60 years has had a significant impact on financial markets, triggering spikes in commodity prices, higher inflation, bond market volatility and sharp sector divergences across stock markets.

It is highly unusual for share prices to consistently perform well year after year. That is the nature of stock markets; they twist and turn in unexpected ways, which makes it hard to stay the course.

In a shortened trading week due to the 250th Independence Day holiday on 3 July, US stock markets finished with a flurry, emboldened by increased hopes of a benign interest rate backdrop after June's non-farm payrolls report came in weaker than expected.

Domestically focused UK bank shares in Lloyds NatWest and Barclays have made significant gains versus the UK's premier benchmark, with average gains of around 50% over the past year, meanwhile the FTSE 100 is up 20%.

A disappointing first half saw the Fundsmith Equity fund report a 3% fall compared with a 11% gain for the MSCI World index, which means the £12 billion global equity fund now lags its benchmark over three, five and 10-years.

US markets were back on the front foot this week with the technology-heavy Nasdaq Composite index leading the charge, gaining 1.5%, and the Dow Jones Industrials scaling to a new high.

Earnings momentum can be a powerful factor driving the performance of company shares.

Some analysts believe Apple is at risk of falling behind in the AI race due to its slow adoption and the delayed roll-out of advanced features.