AI and technology stocks continue to dominate the market, with industrial stocks dragging performance

From Morningstar: 2024-07-08 07:16:00

The stock market’s rally has not widened beyond technology stocks as expected, with big tech continuing to dominate market performance. In the second quarter of 2024, the Morningstar US Market Index gained 3.48%, with 3.46 percentage points coming from the technology sector alone. Industrial stocks were the leading drag on overall performance.

Tech and large-growth stocks, especially those capitalizing on the AI boom, have been driving market gains. Major players like Nvidia, Microsoft, and Apple have significantly contributed to the market’s returns since the start of 2023. Nvidia’s AI GPUs have a dominant market position, while Apple’s new AI features have impressed analysts.

During the second quarter, notable contributors to market performance included AI giants like Nvidia and Apple, as well as Eli Lilly and Costco. However, the market also saw significant detractors, such as Intel and Salesforce, whose stock prices plunged after underwhelming earnings reports. Concentrated returns within a small segment can lead to market suffering if key companies disappoint.



Read more at Morningstar: What Broadening Rally? AI Stocks Dominate Again in Q2