The S&P 500's recent performance is heavily influenced by the "Magnificent Seven" tech stocks, which are driving the index's gains and creating a notable divergence from the equal-weight S&P 500. This concentration in a few mega-cap tech companies highlights a potential risk, as these stocks continue to outperform the broader market. The surge in demand for AI chips, as forecasted by Broadcom, is further boosting investor interest in technology stocks, even those outside the Magnificent Seven. This trend underscores the impact of market capitalization on the index's performance, with the cap-weighted S&P 500 rising more slowly than these leading tech stocks.
The Direxion Daily S&P 500 Bull 2X Shares (SPUU) has responded to these market dynamics, climbing 0.95% to $158.54 as of 12:40 PM on Monday, December 16.