Slide in big tech stocks threatens stability of stock market indices

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Stock market growth is built almost entirely on success of ‘magnificent seven’ tech companies

Slide in big tech stocks is causing problems for indices given their outsized weighting in markets. Photograph: Sebastien Bozon/AFP via Getty Imagesshares suffered their biggest one-day fall since February. Shares in Facebook parent Meta suffered a double-digit percentage decline, even though the company announced better-than-expected earnings.shares, too, have also come under pressure, with the electric car giant losing 15 per cent of its value since its recent disappointing earnings report.

Quite simply, market breath stinks right now. Last week, just 28 per cent of S&P 500 stocks were trading above their 200-day moving average, a noticeably lower number than that seen during last spring’s market retreat. As James Bianco of Bianco Research puts it, both the “S&P 493″ and the “Russell 2993″ haven’t gained at all this year. Mega-cap strength for most of 2023 has masked widespread weakness, so the reversal in tech stock fortunes was bound to hurt indices.

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