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📈 The S&P 500 Is Mostly a Tech Bet

The market has reached 28 record highs this year, but 9 of the 11 S&P 500 sectors are lagging. Technology represents nearly 40% of the index and delivered roughly 12 of the S&P 500’s 13.6-point return, according to Silvia Insights.

Energy is also outperforming, but its roughly 3% index weight means the effect is limited. Excluding technology and energy, the median sector is up barely 1% year-to-date, while 4 of the 9 sectors are negative. Buying the broad market is therefore largely a bet on a small group of technology leaders.

That concentration carries risk if mega-cap technology weakens, but the sector is cheaper than it has been in years. Tatiana Darie, a Bloomberg macro strategist, said on Full Signal that the spread between the S&P 500 and information technology sector’s forward P/E ratios has returned to levels last seen at the start of the pandemic. Nvidia’s market capitalization was then $144 billion. It is now nearing $6 trillion. The broad market is not necessarily a bad trade, but it is mostly one trade.
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