U.S. stocks have been rattled in August by a rise in real interest rates and bond-market volatility, yet “very little about this selloff strikes us as fundamentally worrisome,” according to DataTrek Research.
“Apple is the only Big Tech company really hitting” the S&P 500, said Colas. “Apple’s weakness aside, US Big Tech has been holding its own during this month’s selloff.” The seven U.S. Big Tech stocks in the S&P 500 — Apple, Microsoft Corp., MSFT, +0.56% Google parent Alphabet Inc GOOGL, +1.11%. , Amazon.com Inc. AMZN, +0.20%, Nvidia Corp., Facebook parent Meta Platforms Inc. META, -0.17% and Tesla Inc. TSLA, +1.22% — comprise 26.8% percent of the index, according to DataTrek. Excluding Apple, Big Tech makes up 17.8% of the S&P 500’s decline this month, “slightly less than their collective 19.8 percent index weighting,” Colas said.
“Even with the recent VIX spike, August is looking fairly quiet relative to January – May,” said Colas, referring to the index’s ticker. “That’s predominantly – but not exclusively – good news.” The U.S. economy is chugging along with “still decent” corporate earnings, which are expected to improve on cost cutting in future quarters, according to DataTrek.