“S&P 500 Surges Back Near All-Time Highs with Tech Rally Leading the Way”

The S&P 500 (^GSPC) is back near all-time highs, driven by a recent rally in tech stocks, particularly Nvidia (NVDA), which has seen a nearly 30% increase since its August 5 bottom. This surge in tech stocks has contributed to more than 7% gain in the index overall.

The “Magnificent Seven” tech stocks, including Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA), have collectively added over $1.4 trillion in market cap, accounting for almost half of the S&P 500’s $3.2 trillion market cap gain since August 5.

The Nasdaq Composite (^IXIC) has also rebounded, exiting a correction in just 11 days, marking its shortest correction since October 2011. Ned Davis Research chief US strategist Ed Clissold believes that the rebound in tech stocks was expected after leading the losses in the drawdown.

As Nvidia prepares for a crucial earnings report on August 28, other AI-powered rivals have struggled to meet Wall Street’s expectations during the second quarter earnings season.

Despite the dominance of tech stocks, there have been positive developments in other sectors as well. The S&P 500 equal-weighted index (^SPXEW) has hit a new record high, with sectors like Utilities (XLU), Consumer Staples (XLP), and Health Care (XLV) also reaching 52-week highs.

JPMorgan US equity strategist Abby Yoder views the recent rally as broadening out across different sectors and names, indicating a healthy market. While the S&P 500 has outperformed the equal-weighted index this year, the trend of outperformance among S&P 500 companies has been positive.

Recent economic data suggests a slowing but still growing US economy, aligning with the soft-landing-fueled broadening out trade strategists have been discussing. Yoder believes that the growth backdrop looks healthy, especially with an upcoming Fed interest rate cutting cycle.

Overall, the market rally, led by tech stocks, is showing signs of strength and resilience across various sectors. As the market continues to evolve, experts anticipate further rotations and opportunities for growth in different areas.

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