Apple, Microsoft, Nvidia And Select Others Driving S&P 500 This Year: Are Investors Getting Nervous?

A select number of companies are driving the market rally this year, leading to concerns about the sustainability of the upward movement.

What Happened: The S&P 500 has risen over 9% so far in 2023. However, a significant proportion of the increase, to the tune of 80%, has been driven by just seven companies, reported Financial Times, citing Bloomberg data.

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Apple Inc AAPL and Microsoft Corp MSFT have been driving the rally, contributing around 40% of the index's rise as they added over $1.1 trillion in cumulative market capitalization, the report said.

NVIDIA Corporation NVDA was the third-biggest contributor to the index's rise, followed by Meta Platforms Inc META, the report said.

Next in line was Alphabet Inc GOOG GOOGL along with Amazon.com Inc AMZN and Tesla Inc TSLA.

In comparison, the S&P 400, a gauge for mid-cap equities, is up close to 3% this year while the S&P 600, a gauge for small-cap stocks, is down 0.64% in the period.

Interestingly, this trend isn't new. However, the divide between the top companies and the rest of the market widened over the last week as strong earnings in the tech sector stood in stark contrast with mixed results in other sectors and weak economic data, the report explained.

Expert Take: Stuart Kaiser, head of equity trading strategy at Citi, said many investors were getting nervous about the fragility of the rally, but were unwilling to pull back and risk missing out on further gains.

"People are considering diversifying because the [tech] outperformance has been so wide, but we're not seeing people pulling back yet," he said according to the report.

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