Interest rate cuts bet boost rotation, investors pull out of tech seven giants for the largest loss in a year
The S&P 500’s longest winning streak since November ended on Thursday. The “downdraft” was led by the tech-heavy Nasdaq 100, which includes the so-called FAANG stocks that have powered the index higher this year. Investors sold the “Big Tech” stocks on fears of a faster-than-expected rate cut by the Federal Reserve after inflation data. Investors took profits off the year’s winners, pushing the iShares U.S. Cash Cows ETF to its worst month since May. The volatility brought some stunning data. The S&P 500 fell 1%, even as 400 of its components rose. The equal-weight index, which excludes the heaviest stocks, rose 1.2%, outpacing the weighted index by the most since November 2020. The Russell 2000 index of small-cap stocks with lower credit ratings and higher borrowing needs rose 3.2%, its best performance relative to the S&P 500 since March 2020. A Bloomberg index tracking the FAANG stocks fell as much as 4.1%, its worst since July 2023.