The tech sector is experiencing a tentative rebound, with Apple leading the S&P 500 gains after providing reassuring guidance that offset declines in iPhone sales and challenges in China. However, the recovery lacks conviction, as broader concerns persist. Nvidia's upcoming meeting with former President Trump adds a layer of uncertainty, while the Nasdaq 100 remains down for the week due to jitters surrounding DeepSeek. Investors are increasingly looking towards European equities, with the Stoxx 600 outperforming the S&P 500, and value stocks are gaining favor as a safer alternative to the overvalued big tech stocks.
Bank of America strategist Michael Hartnett has dubbed the big tech stocks as the "Lagnificent 7," suggesting they may underperform this year. The info tech sector, excluding Tesla, Meta, and Amazon, is lagging the S&P 500 by the widest margin since 2016, primarily due to semiconductor struggles. This shift in investor sentiment is also reflected in the better performance of the equal-weighted S&P 500 compared to its cap-weighted counterpart, indicating a move towards broader market opportunities.
The S&P 500 Index is currently trading at 6,110.66 as of 10:27 on January 31, marking a modest rise from its last close of 6,071.17. Despite the tech sector's challenges, the index is nearing its 52-week high of 6,128.18, driven by Apple's positive influence and a cautious optimism in the market.