The Nasdaq Composite Index has lost more than 2% since June 7, and it’s largely because of five stocks. As Bloomberg reports, Apple, Microsoft and Google parent Alphabet have fallen as much as 6.5%, and they account for nearly 30% of the index. If you add Amazon and Facebook to that grouping, they make up almost 75% of the plunge.
Though some analysts believe the tech rally isn’t over. If economic conditions change, financials would be the beneficiaries:
“If the current economic ‘Goldilocks’ environment persists, technology and other growth stocks should continue to outperform, despite today’s price declines,” Goldman Sachs analysts were quoted by Bloomberg as saying in a note late Friday. “However, if investors recalibrate expectations for inflation and Fed policy to match the growth optimism suggested by the S&P 500 level, higher rates should lead to financial sector outperformance.”