The developments in artificial intelligence that have impacted asset prices could help pave the way for stock growth beyond the narrow group of tech stocks that have driven the market higher. About this write Reuters.
Over the past two years, the S&P 500 technology sector has risen 90%, nearly double the growth of the overall underlying index.
But the sector fell sharply in price on Monday as investors factored in the implications of China's cheap artificial intelligence model, with shares of well-known technology companies such as Nvidia, Broadcom and Oracle suffering significant drops.
Market leadership was particularly concentrated in the "Magnificent Seven" group: Nvidia, Apple, Microsoft, Google parent company Alphabet, Amazon, Facebook owner Meta Platforms, and Tesla.
According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, these stocks together account for 55% of the S&P 500's total return since the end of 2022 as of Monday.
This year, however, the G500 as a whole has had a negative impact on the S&P XNUMX as of Monday.
Signs of a nascent rotation were evident amid DeepSeek's decline. Even as the S&P 500 fell 1,5% on Monday, dragging down stocks that carry a large weight in the index, about 70% of the S&P 500's constituents rose.
The S&P 500 growth index, which is largely made up of technology stocks, fell about 3,6% on Monday, while the broader stock index rose nearly 1%. That was the biggest one-day percentage gain for value stocks, not growth stocks, in 30 years of tracking, according to LSEG data.
The G2025's profits are expected to grow by 19% in 12,3, compared with XNUMX% for the rest of the index, says LSEG senior analyst Tajinder Dhillon.
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