Tech accounts for 44% of S&P 500
The US stock market is dominated by tech, with the sector accounting for more than 44% of the S&P 500. The top nine names alone make up roughly 37.7% of the index.
Tech’s strong performance has been driven by the artificial intelligence trade, which has seen double-digit gains for two straight years. This has led to concerns of a potential bubble, with Bank of America strategist warning that upcoming IPOs could push tech’s weighting past every bubble peak on record.
The warning comes as retail traders are leaning long and volatility has gone quiet, classic warning signs of a potential bubble. The strategist pointed to strong price action, retail mania, and slumping volatility as indicators of a bubbly setup.