The markets are extending their gains in this midweek session. Technology stocks are buoying wider market sentiment.
The markets came out of the gate higher across the board but those gains have evaporated.
Tech stocks are joining in on today's market gains on positive trade developments between the U.S.
The markets remain under pressure, including technology stocks, as the Fed meets to discuss interest rates.
Tech stocks remain under pressure, including a 2% decline in Apple stock, while the Dow Jones Industrial Average is eking out a slight gain.
The markets are on pace to finish the week on a positive note after all is said and done.
Citi analyst Christopher Danely remains bullish on AI spending, publishing a report indicating that the impact of the tariffs on tech capex have been overdone.
Throwing yet another wrench into the markets, there is labor market data to process.
Vanguard Information Technology Index Fund (VGT) is down 12% in the last month but has gained 3.5% over the last year. VGT is heavily weighted in Apple, Nvidia, and Microsoft, which account for nearly 50% of its holdings. Despite a 21% correction, VGT's valuation remains high with a P/E ratio of 33.2, but earnings growth is strong at 28.3%.
U.S. stock markets are in turmoil. Since the start of the year, the benchmark S&P 500 has plunged by over 11%, and the tech-laden Nasdaq-100 has dropped by over 16%, as of this writing.
The S&P 500 (SNPINDEX: ^GSPC) is made up of 500 companies from 11 different economic sectors. The information technology sector is the largest by a wide margin, representing 29.9% of the entire value of the index.
VGT has outperformed the SP500 with an average return of 15.52% since 2004, despite recent volatility and a 24.12% loss this year. The ETF is heavily concentrated in tech giants like AAPL, NVDA, and MSFT, which make up 45.98% of its holdings, increasing sector-specific risk. VGT offers a higher CAGR (17.43%) and better diversification with 314 companies compared to its substitutes, making it attractive for long-term growth and regular income.