Funds "flee" technology stocks, "S&P 500 Equal Weight Index" sets the longest consecutive rise record since 2021
With market expectations that the Federal Reserve will cut interest rates in September, the upward trend in U.S. stocks has begun to spread. The S&P 500 Equal Weight ETF has risen for four consecutive months, setting the longest winning streak since 2021. Investor funds have shifted from technology stocks to other sectors, with small-cap and mid-cap stocks also participating in the rise. Although the three major indices experienced slight declines this week, August still recorded an overall increase. Market risk warning, investment should be cautious
As the market increasingly anticipates that the Federal Reserve will cut interest rates in September, the rally in U.S. stocks has begun to broaden—it is no longer just the seven tech giants that are rising; other sectors and stocks are also starting to participate in the upswing.
On Friday, Charles Schwab Chief Investment Strategist Liz Ann Sonders stated:
“There is no doubt that this rally has begun to spread.”
She mentioned that the participation rate among S&P 500 constituents is steadily rising, and the market is not as concentrated in a few companies as it used to be.
Data shows that the Invesco S&P 500 Equal Weight ETF rose 2.7% in August, achieving four consecutive months of gains, the longest streak since May 2021. Equal weighting means that each constituent stock has the same weight, which can reflect the breadth of the overall market, unlike the standard S&P 500, which is market-cap weighted and can be easily dominated by tech giants. This indicates that not only large companies are rising; small-cap and mid-cap stocks are also following suit.
The index fund that packages the “seven U.S. tech giants” in equal weight—Roundhill's MAGS ETF rose about 2% in August, achieving five consecutive months of gains, the longest streak since March 2024. However, the growth rate has slowed, which also supports the earlier statement that “market funds are seeking other opportunities beyond tech giants.”
At Friday's close, the S&P 500 index fell 0.6%, the Dow Jones fell 0.2%, and the tech-heavy Nasdaq fell 1.1%. Although these three major indices experienced slight declines this week, they still recorded gains overall in August. The S&P 500 has risen for the fourth consecutive month, marking the longest streak since September 2024.
Interactive Brokers Senior Economist José Torres stated that investors seem to be taking profits, as September is typically the worst-performing month for U.S. stocks in the year.
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