The "Other 493"

The S&P 500 has been hitting record highs, largely thanks to a few tech giants—the "Magnificent Seven": Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla. But this could be about to change.

Bank of America strategists believe that companies outside this elite group are set to show earnings growth in the second quarter. This would be the first increase for these "Other 493" since late 2022, hinting at a broader market shift. While large-cap tech stocks have recently pulled back, there are great stocks in other sectors which are currently trading at more attractive valuations.

Many S&P 500 stocks are now valued lower than the index itself, creating potential buying opportunities. As the dominance of these tech giants starts to wane in the S&P500, we might see a more balanced market. Ongoing cost-cutting across sectors could boost profits for these companies through 2025 and beyond.

Even though tech giants are likely to remain strong players, with possible ups and downs, there are exciting investment opportunities outside of this sector. Now could be the perfect time to explore a wider range of stocks. If you’d like to dive deeper into these trends or discuss investment opportunities, feel free to reach out.

Disclaimer: This information has been prepared by Jonathan Gottesman who is an Investment Advisor for iA Private Wealth Inc. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

Source: https://www.barrons.com/articles/stock-market-sp-500-investing-ceedabb0