The Technology Select Sector SPDR Fund posted its worst 10-day stretch of underperformance against the S&P 500 since 2002. The slide follows profit-taking in semiconductors and fresh scrutiny of AI spending, signalling a shift away from the tech leadership that drove much of the past two years of equity gains.
Technology stocks just broke a two-year pattern. The Technology Select Sector SPDR Fund (XLK) posted its largest 10-day stretch of underperformance versus the S&P 500 since 2002, a benchmark it had helped push higher through much of the past two years.
Why tech is lagging
Investors are rotating capital toward previously lagging areas of the market while reassessing lofty valuations across several mega-cap technology names, according to Seeking Alpha. Profit-taking in semiconductor stocks and heightened scrutiny of artificial intelligence spending trends have added to the pressure on sentiment.
The divergence marks a notable shift in market leadership. XLK still remains heavily concentrated in some of the world’s largest technology companies, with semiconductor firms making up a significant portion of assets under management.
Where the weight sits
Nvidia leads the fund at 14.65% of assets, ahead of Apple at 12.85% and Microsoft at 8.38%. Chipmakers fill much of the rest, with Micron at 5.42%, Broadcom at 5.41% and Advanced Micro Devices at 5.28%.
The one-month numbers show how uneven the group has been. Intel dropped 16.6% and Micron fell 7.1%, while Apple gained 6.8% and Lam Research rose 9.9%. Nvidia added just 1.6% over the same stretch, despite its position as the fund’s largest holding.
Source: Seeking Alpha
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