The rotation out of technology names and into the broader market is back in focus Tuesday.
The Dow surged 523 points or 1.3%, while the S&P 500 added 0.2% and the tech-heavy index Nasdaq fell 0.3%.
Among the mega 7 tech stocks, Amazon was the only winner, up a meager 0.4%. The iShares U.S Technology exchange-traded fund, one of the most-actively traded tech funds, is down 0.3%.
After last week’s milder-than-expected inflation report, the breadth of the market has gotten better. The past four days have been solid for the small-cap stocks as investors see businesses broadly–beyond technology –benefiting from a coming rate cut. Lower interest rates boost corporate profit by spurring consumer demand, while companies can also refinance their debt at lower rates.
It’s also possible that some investors think the dizzying tech rally spurred by the promise of artificial intelligence has gone too far.