Tech Titans Drive Tuesday's Market Gains

As the holiday-shortened week kicked off, major US stock indexes closed higher on Tuesday, December 24, 2024, led by gains in Big Tech stocks. The S&P 500 added 1.1%, the Dow Jones Industrial Average rose 0.9%, and the Nasdaq composite climbed 1.3%. Tech companies like Apple, Amazon, and Broadcom played a significant role in the market's performance, demonstrating the enduring power of their business models and steady growth.

Tech companies have consistently delivered robust performance, even in the face of rising interest rates. Apple, with a market cap of over $2 trillion, has maintained its dominance in the tech sector, while Amazon, valued at around $1.5 trillion, has expanded its e-commerce empire and cloud services. Their enduring business models and robust management contribute to a balanced portfolio, offering stability and consistent growth.



Despite the author's concern about external factors like geopolitical tensions affecting semiconductor supply chains, the tech sector's performance remains resilient. The author advises against selling these best-of-breed companies, as they are built to last and can overcome current challenges. Moreover, strategic acquisitions by companies like Salesforce demonstrate organic growth and the potential for further expansion.

Energy stocks, often under-owned, performed well on Tuesday, with the S&P 500 Energy sector rising 1.5%. This sector, which includes companies like ExxonMobil and Chevron, presents an opportunity for a balanced portfolio strategy. Their steady dividends and potential for growth make them an attractive addition to a mix of growth and value stocks.

In conclusion, Tuesday's market gains were driven by the enduring strength of tech companies and the potential opportunities in under-owned sectors like energy. A balanced portfolio approach that incorporates these dynamics can help investors navigate the current market landscape and position themselves for long-term success.