The S&P 500 finished the day slightly lower last Friday, but we saw massive underlying rotation out of large-cap Tech and into other sectors.
Even though the S&P finished in the red on the day, the average stock in the index was up 0.48%. Also, there were 333 advancers on the day versus just 169 decliners.
This is what happens when the largest stocks in a cap-weighted index underperform. All year, it’s been the “mega-Tech” stocks in the S&P that have driven the index higher. But that trade came undone in a big way on Friday.
As shown below, the five largest stocks (AAPL, GOOGL, MSFT, AMZN, FB) in the S&P fell sharply on Friday, and they combined to lose $97.42 billion in market cap. The rest of the stocks in the S&P 500 gained $74.37 billion in market cap.
The chart below shows the change in market cap last Friday by sector. As shown, the overall index lost $23 billion in market cap, but that was nearly all due to losses in Tech. Technology sector stocks lost a combined $142 billion in market cap. The money that came out of Tech shifted right into sectors like Financials, Energy, Health Care, Industrials, Materials, Telecom, and Real Estate. All of these sectors saw inflows, with Financials gaining the most at +$59.8 billion. Energy saw the second biggest gain in market cap at $31.2 billion.