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Apple Stock Has Been Lifting The Entire Market

AAPL has been on a tear lately, and the entire stock market has benefited from bullishness towards the Cupertino company. Here’s how.

Who would have thought? After correcting as much as 17% from the peak reached in early January 2022, Apple stock  (AAPL) - Get Apple Inc. Report is already one of the best performing mega cap names of the year. Without it, the US equities market would have been further behind in its early recovery.

Today, the Apple Maven explains the importance of AAPL in keeping the Nasdaq 100, more evidently, and the S&P 500 afloat during a period of turbulence for stocks.

Figure 1: Apple Stock Has Been Lifting The Entire Market

Figure 1: Apple Stock Has Been Lifting The Entire Market

(Read more from the Apple Maven: Apple Stock Could Reach $3 Trillion Market Cap Soon)

AAPL in 2022: a brief timeline

Apple stock started the new year priced at $178 apiece, which represented nearly $3 trillion in market cap. By the end of the first trading day of 2022, shares reached the all-time high of $182.

From that point through fiscal Q1 earnings day, late in January, AAPL headed straight down and accumulated losses of 12.5%. It had been one of the worst starts to a year in Apple’s history.

The holiday season results released on January 27 breathed life into the stock, but the rally was short-lived. From a $176 share price reached in early February, AAPL took another nose dive of 14% and landed just above $150 on March 14.

But over the past few days, AAPL has been roaring back. As of the writing of this sentence, Apple stock had spiked 15% in the past eight trading sessions alone. By comparison, the S&P 500  (SPY) - Get S&P 500 ETF TRUST ETF Report climbed by a more modest 8%.

The importance of AAPL

It is hard to decouple the performance of one stock from the rest of the equities market. For example, Apple and the S&P 500 at large are equally sensitive to macroeconomic and geopolitical developments, including employment, inflation and the Russia-Ukraine crisis.

But it seems clear that, in the past few days, investors have been favoring Apple stock over many other names in the market. And this is good news for most stock investors — even those that do not own AAPL individually.

Currently, Apple stock accounts for a whopping 7% of the S&P 500. Therefore, the market in general has been riding on the coattails of the bullishness towards the Cupertino company.

Now, imagine a hypothetical broad index that did not include AAPL. In that scenario, I estimate that the S&P 500’s recovery of the past week and a half would have been dragged by a bit more than a full percentage point.

In the case of the Nasdaq 100  (QQQ) - Get PowerShares QQQ Trust Ser 1 Report, the impact would have been even more noticeable. AAPL represents 12.5% of the tech-rich index. Without this one stock, QQQ would have missed out on nearly 2 percentage points of gains since March 14.

Twitter speaks

Quiz time: the Nasdaq 100 has been up around 12.5% since the index bottomed for the year, as recently as March 14. How much of the recent gains can be attributed to Apple stock alone?

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)