<\/p>\n
NEW YORK, July 12 (Reuters)<\/strong> – Looming U.S. interest rate cuts are presenting investors with a tough choice: stick with the Big Tech stocks that have driven returns for more than a year, or turn to less-loved areas of the market that could benefit from easing monetary policy.<\/p>\n Owning massive tech and growth companies such as Nvidia (NVDA.O), Microsoft (MSFT.O), and Amazon (AMZN.O) has been a hugely profitable strategy for investors since early 2023, even as the stocks’ market dominance has drawn comparisons to the dot-com bubble of the late 1990s.<\/p>\n That calculus may start to change following Thursday’s surprisingly cool inflation report, which solidified expectations for a near-term rate cut by the Federal Reserve. Lower rates are seen as beneficial to many corners of the market whose performance has lagged this year, including small-caps, real estate, and economically sensitive areas such as industrials.<\/p>\n Market action at the end of the week showed a nascent shift may have already begun. The tech-heavy Nasdaq 100 (.NDX) suffered its biggest drop of the year on Thursday, while the small-cap Russell 2000 (.RUT) had its best day of 2024. The Nasdaq 100 has gained about 21% this year, while the Russell 2000 is up just 6%.<\/p>\n Also on Thursday, the equal-weight S&P 500 (.SPXEW) – a proxy for the average stock in the benchmark index – had its biggest relative gain since 2020 over the S&P 500, which is more heavily influenced by the largest tech and growth stocks. That chipped away at the huge advantage for the S&P 500, which remains up about 18% in 2024 against a 6.7% gain for the equal-weight index.<\/p>\n “The trade got too one-sided and we’re seeing some reversal of this,” said Walter Todd, chief investment officer at Greenwood Capital.<\/p>\n Small caps and the equal-weight S&P 500 extended their gains on Friday even as tech stocks rebounded. Investors cautioned that the moves could be a snap-back after the disparity in performance between tech and other market sectors reached extremes. Further, recent periods of market broadening have been short-lived: for example, small caps surged at the end of 2023, when investors believed rate cuts were imminent, only to lag in the following months.<\/p>\n Source: APNews<\/p>","protected":false},"excerpt":{"rendered":" NEW YORK, July 12 (Reuters) – Looming U.S. interest rate cuts are presenting investors with a tough choice: stick with the Big Tech stocks that have driven returns for…<\/p>","protected":false},"author":123,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[6],"tags":[803,804,805,806,807,808,809,810,811,812,175,813,177,814,390],"class_list":["post-335","post","type-post","status-publish","format-standard","hentry","category-tech","tag-us-rate-cuts","tag-amazon","tag-beyond-big-tech","tag-big-tech-stocks","tag-federal-reserve","tag-inflation-report","tag-investor-sentiment","tag-market-dynamics","tag-microsoft","tag-nasdaq-100","tag-nvidia","tag-russell-2000","tag-sp-500","tag-small-cap-stocks","tag-src"],"_links":{"self":[{"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/posts\/335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/users\/123"}],"replies":[{"embeddable":true,"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/comments?post=335"}],"version-history":[{"count":0,"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/posts\/335\/revisions"}],"wp:attachment":[{"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/media?parent=335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/categories?post=335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swifteradio.com\/update\/hi\/wp-json\/wp\/v2\/tags?post=335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}