The S&P 500 (^GSPC) is back near all-time highs.
The recent rally in the technology sector, including a nearly 30% surge in Nvidia (NVDA), has helped lift the index more than 7% since its August 5 low.
During that time, the “Magnificent Seven” tech stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA) and Nvidia (NVDA) — have added more than $1.4 trillion to their market cap, roughly half of the S&P 500’s $3.2 trillion market cap gain since Aug. 5.
After a massive drop in July, the recent rally helped pull the Nasdaq Composite (^IXIC) out of a correction in 11 days, Recording its shortest correction since October 2011.
Given the way technology has led losses in the decline, it makes sense for prices to rise, Ed Clissold, chief strategist at Ned Davis Research in the US, recently told Yahoo Finance.
Now, some of the biggest names in the sector are sitting near 52-week highs ahead of Nvidia’s crucial earnings report on August 28.
During the second-quarter earnings season, some of Nvidia’s AI-powered rivals delivered a mixed bag of results that struggled to meet Wall Street expectations.
“This will be the ninth straight day that the S&P has gone up,” Niles Investment Management founder Dan Niles told Yahoo Finance on Tuesday. “It’s the longest streak since 2004. I wouldn’t necessarily push Nvidia to report on this.”
“But I think if you’re not worried about what’s going to happen the next day and you’re thinking about this over a multi-year period of time, it should be in pretty good shape.”
And while AI trading was once again driving the market’s latest bullish move, there were promising developments beneath the surface as well.
The S&P 500 Equal-Weighted Index (^SPXEW), which is less affected by moves in big tech companies than the market-cap-weighted S&P, hit a new record high. Sectors including utilities (XLU), consumer staples (XLP) and healthcare (XLV) are now sitting at 52-week highs, while financials (XLF) are currently at a record high.
“This has been a really healthy rally from our perspective,” Abby Yoder, U.S. equity strategist at JPMorgan, told Yahoo Finance. “This has been the expansion. The range is the best since the summer of last year. In terms of participation across different sectors, different names.”
However, the S&P 500 is up about 18% this year, outpacing the equal-weighted index’s gain of about 9% this year.
“The reality is that in bull markets, all sectors typically go up,” said Kevin Gordon, chief investment strategist at Charles Schwab.
In July, Gordon’s team at Schwab noted in a Yahoo Finance Chartbook report that the number of S&P 500 companies that outperformed the index on a rolling monthly basis had fallen to a historic low.
Since then, that narrative has completely flipped. As of Monday’s close, nearly 58% of companies in the S&P 500 were outperforming the index, the largest tranche of outperformance since November 2022, when the current bull market began.
“The trend is much more important,” Gordon said. “By these measures, things look relatively healthy.”
Recent economic data has shown the US economy slowing but still growing, and market moves over the past few weeks are in line with the soft-landing, trade-driven expansion that trade strategists have been discussing since the beginning of 2024.
While technology is likely to contribute to the rally, JPMorgan’s Yoder said there could be more scope for a pivot into other areas as “the growth backdrop looks healthy and we’re about to embark on the Fed program.” [interest rate] “Cutting cycle too.”
Josh Schaffer is a reporter at Yahoo Finance. You can follow him on X @_Joshshafer.
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