AI and defence spending fuel record stock market gains in early 2024
Global stock markets have seen strong gains in early 2024, driven by artificial intelligence demand, defence spending, and expectations of lower interest rates. While detailed real-time data for every Euro Stoxx 50 company remains hard to consolidate, tech and semiconductor firms—particularly those linked to AI—have led the rally.
In the US, major firms like Amazon, Goldman Sachs, and Caterpillar have climbed over six percent since January. Meanwhile, Europe’s top performer, Poland’s InPost, has surged by 37 percent, showing how the AI and logistics boom is spreading beyond traditional tech sectors.
The AI sector continues to dominate market movements. Nvidia CEO Jensen Huang highlighted storage solutions as the biggest unmet need in AI, pushing up shares of SanDisk by 40 percent since January. Western Digital and Micron have also benefited, alongside Lam Research, a supplier of memory production equipment, which rose by 17 percent.
Defence contractors are another standout group. Saab, BAE Systems, and Rheinmetall have gained on expectations of increased military budgets under former US President Donald Trump’s proposed plans. These firms have outperformed as geopolitical tensions keep defence spending high. Caterpillar’s stock rise ties to two key areas: oil extraction projects and energy storage systems for data centres. The company’s growth reflects broader industrial demand linked to AI infrastructure. Meanwhile, Amazon and Goldman Sachs have also seen gains above six percent, though Apple has struggled due to tariffs and falling behind in AI innovation. In Europe, the Euro Stoxx 50’s strength comes from tech and semiconductor firms like ASML, boosted by strong Asian markets, record highs at Samsung, and demand for AI chips. Investors also expect lower interest rates, improved economic conditions, and high liquidity at the start of the year, supporting growth-oriented stocks.
The early 2024 rally shows how AI demand, defence spending, and economic optimism are reshaping markets. Tech and semiconductor firms remain key drivers, but gains are now spreading to logistics, defence, and industrial sectors. With no sign of the AI boom slowing, these trends are likely to influence stock performance in the coming months.
