The S&P 500 is experiencing a narrowing rally as investors contend with slowing tech profits and geopolitical tensions, particularly the investigation into Nvidia by China over potential anti-monopoly violations. This situation is perceived as a short-term headwind, likely a reaction to US chip curbs, rather than a long-term issue. Despite these challenges, the Magnificent Seven, a group of leading tech companies, continue to attract investor interest with their strong cash generation and earnings, even as their profit growth is expected to decelerate. The market's focus on these large-cap tech stocks has resulted in a narrow rally, raising concerns about potential volatility if these giants falter. Some investors are exploring alternatives, which could lead to a sector rotation and potentially broaden the market rally.
The iShares Core S&P 500 ETF (IVV) saw a slight decline, dropping 0.40% to $608.38 at 14:20 on Monday, December 9.