Technology stocks, the principal engine of the stock market’s hike to records over the last several months, are now among those leading Wall Street’s drop on rising concerns over the coronavirus epidemic.
The S&P 500 information technology industry has dipped 9.3% since Thursday’s shut, ousting a fall of 7.3% for the broader index. Only energy has performed worse, reflecting a pointy drop in oil prices on fears that the coronavirus will slow global financial activity.
Traders poured billions into giant technology shares and other momentum bets in 2019, as a dovish Federal Reserve kindled risk appetite and fueled a rally of over 30% in the S&P 500. Some big technology and momentum shares kept griding higher, driving markets to records even as concerns grew over the coronavirus’ spread in China in recent weeks.
Now a climb in coronavirus cases outside of China has made some investors more keen to part with riskier assets in favor of safe havens like gold and U.S. Treasuries, which have soared in recent days.
Stanton rode Amazon’s shares and other massive technology names higher in 2019.
As of Friday, the S&P 500 data technology industry accounted for almost 55% of the overall S&P 500’s total returns this year, despite the fact that the sector was only 24.3% of the benchmark index’s market value, based on Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.
Only four companies, Microsoft, Amazon, Apple, and Google, accounted for 46.4% of the 2020 whole return as of Friday, Silverblatt stated.