Big Tech shares lose lustre as US market rocked by violent rotation
1 min read
Big Tech stocks are “no longer the only game in town”, according to investors who over the past week have moved out of the megacaps that have driven the market rally for years in favour of smaller companies and other previously unloved sectors.
The Russell 2000 small-cap index has jumped 7 per cent since last Thursday, in a dramatic market shift sparked by
He and several other analysts also highlighted the delicate balance required for smaller companies to keep rising: they need the Fed to start cutting rates, but without a big economic downturn that could damage their earnings. Market moves on Thursday highlighted this risk, with the Russell 2000 falling back 1.9 per cent after data showing jobless claims at their highest level since 2021.
Even after the gains over the past week, small-caps and the equal-weighted version of the S&P 500 are still trailing well behind the benchmark S&P 500, and investors are wary of getting carried away.
“You’ve closed the gap a little bit in the last week,” said Nelson at Calamos. “But you can’t undo years of underperformance in five days.”
