Equities Rebound: Tech and Cyclical Stocks Surge in Powerful Market Recovery

Danske Bank says a broad-based market recovery is underway led by technology and cyclical stocks, driven by stronger earnings, cooler inflation, stable employment and a likely Fed pause. Tech names (e.g., Apple, Microsoft, NVIDIA) are powering the rally from cloud, AI and cybersecurity demand, while cyclical sectors—manufacturing, energy and consumer discretionary—are benefiting from revised-up GDP and rising consumer spending. The bank views the rebound as fundamentally supported rather than transitory, recommends maintaining exposure to both growth and value sectors, and highlights sector rotation as a key dynamic. Risks include geopolitical tensions and potential inflation surprises, but the base case remains positive with upside through 2025 if data hold.