The decline of American technology stocks: the market capitalization of the five giants has shrunk by 21 trillion yuan, and their influence is much lower than before.
Beijing, Nov. 14 (Xinhua) over the years, as the share prices of technology giants have soared to record highs, their influence on the U. S. stock market has also been rising. But now that influence has been greatly weakened by the stock market crash of 2022.
The market capitalization of the Big five has shrunk by 21 trillion yuan, even after last week's rally, Apple, Microsoft, Amazon, Alphabet, the parent company of Google and Meta, the parent company of Facebook, lost more than $3 trillion (21 trillion yuan) in market value this year as slowing revenue growth and rising interest rates hit their share prices. That reduced their weighting in the S & P 500 to about 19 per cent from a record 24 per cent in September 2020.
Data show that Apple, Microsoft, Alphabet, Amazon and Meta are responsible for about half of the decline in the S & P 500 this year. If all the constituent stocks in the index were equally weighted, rather than based on actual market capitalization, the index would fall by 6 percentage points this year.
The shift in the weight of the tech five from 24 per cent to 19 per cent shows how much the stock market landscape has changed since the Fed urgently launched loose monetary policy that sparked a speculative frenzy. As the influence of the technology sector wanes, more traditional sectors such as energy and banks are gaining weight in the S & P 500, with companies such as ExxonMobil and Wells Fargo benefiting from high oil prices or rising interest rates.
"large technology stocks in particular benefit from the almost endless liquidity and cheap capital brought about by rapid growth," said Dirk Friczewsky, market analyst at ActivTrades, an independent broker. "now there is a different wind in the financial markets and investors do not want to be eliminated."
Us data released last Thursday showed that inflation slowed more than expected in October, easing the pressure on technology stocks and fuelling optimism that the Fed might soon stop its most aggressive cycle of interest rate hikes in decades. that pushed the Nasdaq 100 index up 9.4% on Thursday and Friday, its best two-day performance since 2008. Even so, the Nasdaq is down 28% this year, and the s & p 500 is down 16%. And not everyone believes that last week's rebound in technology stocks will continue.
