Synopsis
Investors are moving away from technology stocks and toward industrial, healthcare and small-cap companies. The move signals a potential broadening of market leadership. Fourth quarter results will be crucial in determining the sustainability of this trend. Experts believe that conditions are favorable for this expansion, with the benefits of AI expected to affect various sectors.
P.A.Technology and technology-related stocks led much of the rally that began in October 2022, just before the launch of the ChatGPT chatbot that sparked enthusiasm for AI-related stocks.
New York: after years of watching technological stocks If investors are driving the U.S. bull market, investors are betting that the rally will extend to industrials, healthcare and small-cap companies, with a chance they can catch up and assert their market leadership.
Stocks such as Nvidia, Alphabet and Broadcom have supported the market’s sustained recovery, during which the S&P 500 has risen more than 90% since the bull market began more than three years ago.
But investors are wary of pricey tech valuations amid uncertainty around AI that has propelled the market’s gains, worries that have helped other stocks make inroads.
Industrial, healthcare and small-cap stocks have outperformed the S&P 500 since late October, while the technology sector has declined. That rotation was on display Wednesday as the S&P 500 technology sector fell more sharply than broader market indexes.
“There is a lot of hope that this year will be the year where we see a real expansion of leadership,” said Angelo Kourkafas, senior global investment strategist at Edward Jones. “The conditions are likely ripe for this broadening to happen, especially when you add high valuations. There are some pockets of value that can be found beyond technology.”
Fourth quarter results in the coming weeks will take into account the sustainability of the widening trend. A wide range of sectors are expected to post strong profits in 2026.
“Strategists have been predicting better earnings for a long time, but I definitely think it carries weight this year,” said Nanette Abuhoff Jacobson, global investment strategist at Hartford Funds. “We’re starting to see the benefits of AI spread across such a wide range of industries.”
“AVERAGE” S&P 500 STOCKS NOT SO AVERAGE
Technology and technology-related stocks led much of the rally that began in October 2022, just before the launch of the ChatGPT chatbot that sparked enthusiasm for AI-related stocks.
At the end of last year, the trend began to reverse. One factor to consider was concern that AI investments would not generate sufficient returns to justify high valuations, investors said.
“With some questions being raised about technology, investors are wondering what other areas I could invest in,” said Keith Lerner, chief investment officer at Truist Advisory Services.
In another sign of broadening, the equal-weighted version of the S&P 500, which measures the average stock in the index, has gained more than 5% since late October. That represents a 1% rise for the standard S&P 500, which is more heavily influenced by heavyweight stocks.
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(What’s moving Sensex And Clever Track latest market news, stock market advice, Budget 2025, Equity market on the 2025 budget And expert adviceon AND Markets. Additionally, ETMarkets.com is now on Telegram. For the fastest news alerts on financial markets, investment strategies and stock market alerts, subscribe to our Telegram feeds .)
Subscribe to AND Bonus and read it Electronic document on economic times Online.and Sensex today.
Most trending stocks: SBI share price, Axis Bank share price, HDFC Bank share price, Infosys share price, Wipro stock price, NTPC stock price
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