Seize Opportunities in the US Stock Market: From Investment to Trading

The US stock market is the destination for millions of global investors. With a dominant 75% of the total global market capitalization, it is not only the largest playground but also a reflection of the economic health of the world’s leading economy. But how can you participate in US stock trading effectively? This article will help you understand better.

Market structure and major US stock exchanges

The US stock market operates under the management of two giant exchanges: the New York Stock Exchange (NYSE) and Nasdaq. As of September 30, 2022, according to estimates from Intercontinental Exchange, the total market value exceeded $46.5 trillion, with NYSE accounting for over $30.1 trillion.

Due to the thousands of listed companies, the exchanges have created indices to help investors easily monitor the market. The S&P 500 index tracks the 500 largest companies on NYSE, while Nasdaq 100 measures the top 100 companies on the Nasdaq.

US stock performance over the past 5 years

Numbers don’t lie. Over the past 5 years, the US stock market has shown impressive growth:

• S&P 500 Index: up 85.78%
• Dow Jones Index: up 54.13%
• Nasdaq 100 Index: up 147.43%

At the individual stock level, “tech stars” listed with astonishing figures:

• Microsoft (MSFT): up 256.33%
• Apple (AAPL): up 261.33%
• NVIDIA (NVDA): up 1,908.58%

Four US stock indices investors need to know

Dow Jones Index (DJIA)

Founded by Charles Dow in 1896, the Dow Jones is the oldest and most closely watched index. It represents about 25% of the total market value. Currently at 44,284.8, this index reflects broad economic activity and is sensitive to geopolitical events, pandemics, or energy crises.

S&P 500 Index

Established in 1957 and managed by S&P Dow Jones Indices, the S&P 500 is now the best benchmark for large-cap stocks. It accounts for 70% of the US stock market value as of March 27, 2024, with a level of 6,045.6. Although 50% of its value is determined by the top 45 companies, it remains the most diverse and comprehensive measure.

Nasdaq Composite

Founded in 1971, Nasdaq Composite includes companies of all sizes, especially speculative firms with small market caps. This index often reflects technology trends and investor sentiment. Currently at 18,210, it is considered the most sensitive index to technological fluctuations.

Nasdaq 100

Launched in 1985, Nasdaq 100 differs as a non-financial index, focusing on sectors such as Technology, Telecommunications, Biotechnology, Media, and Services. With a current value of 21,426.8, it has increased by 24.17% over the past 6 months since October 2023.

How to make money from US stocks

Vietnamese investors face challenges because current laws do not permit direct buying and selling of US stocks. However, a common solution is margin trading through Contracts for Difference (CFD).

Instead of owning securities, investors profit from price differences. This method allows for both upward and downward movements, offering greater flexibility compared to traditional investing.

Detailed US stock trading hours

NYSE and Nasdaq operate according to the following schedule:

• Regular trading: Monday to Friday, 8:30 PM to 2:00 AM (Vietnam time)
• Pre-market trading: 7:00 PM to 8:30 PM
• After-hours trading: 3:00 AM to 5:30 AM

For major indices like S&P 500 (SPX500) and Nasdaq 100 (NAS100), trading hours differ slightly between summer and winter, usually from Monday to Saturday.

Notable US stocks to watch in 2024

Investors are looking for stocks with strong growth potential. Here are some standout stocks with performance over 1 year:

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

These stocks are in healthcare, biotech, and other niche sectors. Despite market difficulties in 2022-2023 due to energy crises, Russia-Ukraine war, and Fed rate hikes, these stocks still found growth opportunities.

Development trends of 4 US stock indices

Dow Jones: After a sharp correction from the peak of 36,799 (4/1/2022) down to 28,690 (9/30/2022), a 28.3% decline, the index has recovered. In the first 3 months of 2024, it increased by 5.59% as the Fed signaled potential rate cuts.

S&P 500: Similar to Dow Jones, the S&P 500 faced pressure from global economic slowdown. However, since October 2023, the decline has slowed. The index rose nearly 10% in the first 3 months of 2024 and remains closely watched.

Nasdaq Composite: Trends similarly to the S&P 500, quickly recovering from lows and turning upward. March 2024 saw a 2.28% increase.

Nasdaq 100: After fluctuations in 2022-2023, this index showed a clear recovery from October 2023. It reached 16,000 in November, then surpassed 18,000 in March 2024, up 24.17% over 6 months.

Key factors influencing the future

Fed’s monetary policy: Investors expect the Fed to cut interest rates in 2024-2025. According to Goldman Sachs, there will be 3 cuts in 2024 and 4 in 2025, bringing rates down to 3.25-3.5% by the end of 2026.

Geopolitical situation: The Russia-Ukraine war and Israel-Hamas conflict could impact financial markets. Investor David Bahnsen warns that markets could decline 7-10% if Middle East conflicts escalate.

Final thoughts

The US stock market is entering a prosperous phase with many opportunities for investors. Despite challenges from global economic conditions, key indices still show strong recovery signs. With an understanding of how the market operates, key indices, trading hours, and potential stocks, investors can confidently participate in the US stock market and develop suitable investment strategies.