Five stocks, including Nvidia and Amazon, make up majority of S&P 500 returns

From Nasdaq: 2024-07-05 06:04:00

Stock market investors have seen a strong start to 2024 with the S&P 500 producing a total return of 15.3% through June. The majority of these gains have been driven by just five stocks, including Nvidia, Microsoft, Alphabet, Amazon, and Meta Platforms. These companies accounted for about 63% of the S&P 500’s increase in value, with Nvidia leading the pack with a market cap increase of $1.816 trillion. As the stock market becomes increasingly concentrated among a few companies, investors should consider diversifying their portfolios beyond the largest companies. This could be achieved through investments in ETFs like the Invesco S&P 500 Equal Weight ETF or the iShares Russell 2000 ETF to gain exposure to smaller companies with potential for growth. Investors should also be mindful of valuations when considering investments in high-flying stocks like Nvidia, which has a forward PE of around 47. While concentration in the market isn’t necessarily a concern, looking beyond the biggest companies may present more opportunities for investors to capture the next leg up in the market.



Read more at Nasdaq: These 5 Stocks Account for 63% of the S&P 500 Returns So Far This Year. Can Their Dominance Continue?