Stocks fell hard by midday Thursday, as leadership from large cap tech was removed from the equation.
The S&P 500 fell about 1%, as the tech-heavy Nasdaq fell 0.2%. The 10-Year Treasury yield fell hard to 0.63%. Yields fall when prices rise.
Jobless claims were not as bad as expected and virus cases continued to climb. After an S&P 500 run-up of about 5% for the past two weeks or so, the market is taking a pause, while virus-related headwinds and questions of more fiscal stimulus remain. Meanwhile, unemployment remains above 11% and some question its ability to fall quickly.
Since June 9, cyclical value stocks have fallen, with the Vanguard S&P 500 value ETF VOOV down about 11%. That ETF holds defensive name as well, notably.
But the S&P 500. Since that date, the S&P 500 is only down about 3%, as FANG stocks and semiconductor stocks have continued to rise, as investors search for growth trends that can overpower cyclical headwinds, in the face of rising cases and paused state reopenings. These tech stocks have an outsized weighting in the major indices.
Large cap oil, banking, consumer discretionary and industrials were down between 1.3% and 3.7% and the S&P 500’s fall Thursday outlines what happens to the broad indices when leadership from big tech is stripped out of the equation.
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