XLK rebounded strongly in 2025, fueled by robust AI demand, strong tech earnings, and easing trade tensions with China. Tech sector earnings growth exceeded expectations, with mega-cap names like NVIDIA, Microsoft, and Broadcom leading the charge. XLK offers diversified exposure to leading large-cap tech stocks, making it a top pick for high-risk-tolerant investors seeking strong returns.
After reaching a multi-year low in early April amid the tariff-related market selloff, the Technology Select Sector SPDR Fund NYSEARCA: XLK has recovered some ground as of mid-May. However, the tech sector as represented by this benchmark fund is still experiencing a lackluster start to the year; XLK is down more than 6% year-to-date (YTD).
I am navigating the 'Trumpcession' by focusing on low-cost, tech-focused ETFs like XLK, which offer resilience and long-term growth potential amid economic uncertainty. Despite potential stagflation and recession risks, I believe US tech companies will innovate and rebound, making them attractive investments during market corrections. I also see opportunities in undervalued single stocks with strong fundamentals and Bitcoin as a hedge against poor policymaking and unreliable governments.
The XLK ETF has corrected to below 25x forward earnings, making it attractive due to its strong weighting in growth companies like Microsoft and Nvidia. Tariffs and trade wars could negatively impact tech companies, particularly Apple, by increasing costs and reducing margins, affecting their stock performance. Diversification within the ETF, especially in software companies like Microsoft, Salesforce, and Palantir, mitigates some risks associated with hardware production and tariffs.
Launched on 12/16/1998, the Technology Select Sector SPDR ETF (XLK) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
After a hot run driven by artificial intelligence (AI), technology stocks are now showing weakness, with widespread losses as technical indicators suggest more downside ahead.
JPMorgan's Meera Pandit and Charles Schwab's Kevin Gordon, join 'Closing Bell' to discuss the market rotation and frustration with the 'Mag 7'.
Brian Jacobsen, Annex Wealth Management chief economist, joins 'Power Lunch' to discuss the tariffs impact on the economy and market.
Designed to provide broad exposure to the Technology - Broad segment of the equity market, the Technology Select Sector SPDR ETF (XLK) is a passively managed exchange traded fund launched on 12/16/1998.
The tech sector has produced many stocks that have outperformed the S&P 500.
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