Apple leads US stocks up but growth as well as small-cap stocks may be running out of steam

US stocks rose on Thursday.

The S&P 500 rose 0.5 percent and the Nasdaq Composite jumped 1.2 percent on the back of a 2.9 percent surge in Apple that took the latter's market cap above US$1 trillion.

However, Thomas Moore, the ‎investment director at Aberdeen Standard Investments, thinks that the time is now right for a rotation out of growth stocks.

“Investors have lost sight of valuations in the last few months,” said Moore, adding that “conditions are there for a rotation in the second half of the year”.

Another group of stocks that may be vulnerable is small caps.

Michael Wilson, Morgan Stanley’s chief US equity strategist, said he was “a bit leery about the fact that small caps have become a perceived safe haven in the event of trade conflicts” and that this “perception may now be overpriced”.

Morgan Stanley sees a “rolling bear market” and small caps could be about to turn.

Wilson said that “if we are right and U.S. large-cap growth stocks and small-cap stocks finally take their turn in the rolling bear market, we would view it as the final inning of the game we expected this year”.