S&P 500 is surviving Big Tech's slide as 'other 493' catch up
Published On Sep 15, 2024, 9:00 AM
The article discusses how the S&P 500 Index has recently performed well despite declines in major tech stocks like Nvidia and Microsoft. This shift marks a change from the previous trend where these tech companies significantly drove market growth. Investors are now looking towards sectors like real estate, consumer staples, and utilities as fears of slower economic growth grow, alongside the Federal Reserve's expected interest rate cuts. There’s an observable rotation into these 'other 493' stocks, suggesting a diversification away from high-flying tech firms. Several sectors other than tech have shown impressive earnings growth, particularly in healthcare, prompting investor interest.
Stock Forecasts
VIG
Positive
Investors are likely to see positive shifts in sectors like real estate and utilities, as they provide relative safety in uncertain economic times. The anticipation of interest rate cuts from the Federal Reserve also bolsters these sectors, making them attractive. However, tech stocks might not be entirely dismissed, especially those with robust earnings potential. Thus, a diversified investment strategy focusing on both defensive sectors and selective tech stocks could be prudent.
XLU
Positive
Given the decline in the tech giants and a market shift towards more defensive stocks, the expectation is that ETFs focused on traditional sectors like utilities and real estate will see increased demand. This suggests a possible downward pressure on tech stocks as investors pull back. Nevertheless, stocks in the healthcare sector are also showing robust growth potential, aligning with the observation of earnings recovery.
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