The “Artificial” Magic in the Stock Market Rally
The stock market (S&P 500 index) is up nearly 17% for the
first half and has proven surprisingly resilient despite
numerous challenges. These include ongoing recession
worries, instability in regional banks, and high inflation.
However, for many investors, the S&P 500’s performance
does not reflect the results of their diversified equity
portfolios.
That’s because a narrow group of big technology-related
stocks, many powering artificial intelligence (AI), are
dominating the returns in the overall index. These stocks
are some of the largest in the S&P 500 index and include
Alphabet (Google’s parent company), Apple, Amazon,
Advanced Micro Devices, Nvidia, Meta Platforms (formerly
Facebook), Microsoft, and Tesla. For the year, these eight
stocks contributed 14.6%, while the rest of the stocks in
the S&P 500 only contributed 2.1%.