Big Tech Is No Longer Carrying the Stock Market
One by one, the concerns that have hung over the stock market have faded.
Fears that the United States economy would dip into a recession this year have eased. The Federal Reserve seems to be finished raising interest rates for the foreseeable future, and optimism has increased that the United States and China could end their trade war.
But if the January snap back (it was the best start to a year for stocks in decades, after the worst December for stocks in an even longer period), is to sustain itself, big technology companies likely will have to lead the way.
So far this year, they have not done that.
For much of the past decade, the fate of the stock market has been tied to the performance of a handful of the largest tech companies: Amazon, Apple, Alphabet, Facebook, Microsoft and Netflix led the market from one record to the next.
By the end of August, their sway over the direction of the S&P 500 exceeded all but two of the index’s 11 sector groupings. As the index pushed to a record high last summer, the rise in those six companies’ shares accounted for half of its gain. They led on the way down too, dragging the broader market lower over the final three months of 2018 and nearly ending the longest bull market on record.
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