The S&P 500 was Lifted By Big Tech Stocks. The Rest of The Market is Poised to Rise.

May 17, 2023

he S&P 500 was Lifted By Big Tech Stocks. The Rest of The Market is Poised to Rise.

Big Tech stocks have saved the S&P 500 this year as most other stocks have struggled. This might imply that there is potential outside of tech companies. However, certain dangers should make investors wary.

The S&P 500 has gained about 8% this year because Big Tech companies like Apple (AAPL) and Microsoft (MSFT) have risen more than 30%. Their combined market capitalizations are little more than $5 trillion, accounting for over 15% of the total market capitalization of the S&P 500. Because the index is weighted by market value, the share price changes of these highly valued firms significantly impact the index’s movement.

The two key drivers of Big Tech’s rise are lower bond rates and higher-than-expected profitability. Lower long-term bond rates make future cash profits more desirable — and these developing businesses are still valued on the assumption that most of their revenues will arrive many years in the future. Artificial intelligence is boosting sales and profitability by driving product improvements.

Meanwhile, the rest of the market has underperformed. The Invesco S&P 500 Equal Weight exchange-traded fund (RSP) has been relatively flat this year. This ETF weights each firm in the index equally, removing the disproportionate impact of Big Tech and displaying the movement of the average stock. According to Morgan Stanley, it has underperformed the conventional market value-weighted S&P 500 since the end of 2022, and the degree of underperformance has been nearly as severe as it has been in any period in the past couple of years.

The difference is that, except for technology, most equities have been dragged down by a predicted drop in economic demand. The market is concerned about the long-term implications of the Federal Reserve‘s interest-rate hikes. Furthermore, recent financial issues appear to be further damper lending and expenditure.  

There is some good news in all of this for people looking for non-tech names. Given previous patterns, the underperformance of the equal-weighted S&P 500 ETF is unlikely to worsen. After all, the ETF’s price compared to the traditional S&P 500 is about as low as it’s been in the last couple of years.

As a result, if the market increases, most non-tech equities might beat Big Tech stocks and the traditional S&P 500. If the market and technology both collapse, the average stock may do better. This is especially true if the slowdown in economic growth is nearing an end. Already, both GDP growth and the pace of inflation have slowed slightly. Investors are concerned that more devastation is on the way. Still, if the economy stabilizes by the end of this year, most equities might begin to experience significant gains, especially if the Fed stops raising interest rates.These are significant issues to keep an eye on for people who are hesitant to buy Big Tech stocks following their tremendous upward run.

Subscribe Our Newsletter

Rivian, Robinhood, Bumble: How Some Of 2021's Biggest IPOs Are Faring
Rivian, Robinhood, Bumble: How Some Of 2021’s Biggest IPOs Are Faring

The largest IPOs of 2021 and 2020, as assessed by the amount of money collected, demonstrate that stocks of the top five IPOs of last year performed worse than those of the largest IPOs to go public in 2020.

Companies
crypto liquidity platform

Nato

B2CONNECT Liquidity Hub: Rebranding, New Features, and Better Connectivity

Discover B2CONNECT, the newly rebranded crypto liquidity hub from B2BROKER, offering seamless spot and futures access for brokers and exchanges.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

What Is a Bear Flag Pattern? Trading with Bearish Flags
Learn what a bear flag pattern is, what characteristics it has, and how to detect it when trading.

discover
Best DAO projects in 2025

Constantine

Best DAO Projects in 2025

Just a few years ago, DAOs were an experimental concept only crypto insiders talked about. Fast-forward to 2025, and these decentralized communities are shaping the future of finance, governance, digital identity, and even culture. From billion-dollar treasuries to funding public goods and pioneering new models of online collaboration, DAOs are doing what no boardroom ever […]

Blockchain
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business

    Constantine

    How to Start a White Label Brokerage?

    How to start a white label brokerage

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.