The combined weight of Apple and Microsoft in the S&P 500 hit an all-time high as investors seek refuge behind the backs of the two tech giants, which have a market capitalization of over $2 trillion.
Citing data from Strategas Securities, the Wall Street Journal reported that Apple and Microsoft currently account for about 13.3% of the S&P 500: 7.11% for the iPhone maker and 6.14% for the software heavyweight.
That’s the highest level of dominance any two stocks have had in a broad market index since IBM and AT&T in 1978, analysts say.
The rising clout of Apple and Microsoft comes as stocks are up 23% and 14% respectively in 2023, recovering from sharp losses last year.
Recently, technology stocks have been considered relatively safe on the stock market. In the immediate aftermath of the collapse of Silicon Valley Bank, tech stocks surged as investors welcomed their limited involvement in the banking sector.
But perhaps the strongest driver of tech stock returns is the sharp decline in bond yields and expectations that the Fed will cut benchmark rates several times by the end of the year as it copes with the fallout from the biggest bank failure since 2008.