Stock market: A small group of tech stocks is driving the market rally — why that's 'not a flaw'
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Published 2024-06-25
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This year's stock market rally has been led by just a few large tech names.
While it might seem concerning to have too much riding on a handful of stocks, strategists say the trend may not be a bad thing for markets.
"We see a small group of tech winners leading stock gains as a feature of the artificial intelligence (AI) theme — not a flaw," Jean Boivin, head of BlackRock Investment Institute, wrote in a research note on Monday. "We stay overweight U.S. stocks."
AI darling Nvidia (NVDA) has accounted for nearly one-third of the S&P 500's gains this year, and outperformance in quarterly results from large-cap tech continues to be a reason why earnings for the S&P 500 are growing year over year.
As of Monday's close, Apple (AAPL), Alphabet (GOOG, GOOGL), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Broadcom (AVGO) had also contributed more than a quarter of the major index's gains.
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