Fangzheng Securities: The valuations and concentration of the US stock market are currently back to the high range, and the short-term potential for further increase may be relatively limited.

Fangzheng Securities research report stated that since July, with the easing of tariff policy risks and the relative resilience of the US economy, market expectations for the year-on-year EPS growth of US stocks have been significantly raised. In the second half of the year, the US economy may trend towards a mild downturn, bringing certain pressure on US stock earnings. However, in the context of unrelenting AI prosperity and relatively low risk of US economic recession, US stock earnings still need to be closely monitored. For US stocks, market concentration has reached a new high again, largely reflecting the high prosperity of technology growth stocks represented by AI, but also leading to an increase in market fragility. The current valuation and concentration of US stocks have returned to the high range, and the short-term upside potential may be relatively limited, increasing the probability of sector rotation, while remaining optimistic in the medium to long term.