Tech heavyweights index influence on the rise again. pic.twitter.com/XiH2G56sib
— Todd Sohn (@Todd_Sohn) March 21, 2023
Today’s Chart of the Day was shared by Todd Sohn of Strategas (@Todd_Sohn). The green line represents the combined weights of the two largest stocks within the S&P 500 over the past 30-years. $AAPL and $MSFT are currently the largest, but keep in mind that the green line measures whichever two stocks were the largest at that point in time (ex. $GE & $XOM in 2004.) Mega-Cap Tech has been doing a lot of the heavy lifting recently, with $AAPL and $MSFT accounting for more than half of the S&P 500’s YTD gains. Todd points out that their combined weight within the S&P 500 has reached an all-time high of 13.2%. For reference, that’s larger than the entire bottom four sectors combined (Energy + Utilities + Materials + Real Estate = 11.5% weight.) This isn’t outright bearish, but it does raise concentration risk, as two stocks have never had so much influence over the S&P 500.