Big Oil Is the Magnificent Seven’s Hedge-in-Waiting
The tech sector’s weight in the S&P 500 is roughly eight times that of energy, a gap wider than at the height of the dot-com bubble.
Trailing tech.
Photographer: Michael Nagle/Bloomberg via Getty Images
May 17, 1995, a Wednesday, was a historic day for energy stocks. Not that they acted that way: Like the oil price — about $20 a barrel — they were flat. The action was elsewhere: Technology stocks overtook the energy sector’s weighting in the S&P 500 for the first time that day. Bloomberg News noted the Nasdaq’s rise versus the Dow’s drop, sparked by a big earnings beat from chip-equipment maker Applied Materials Inc. Netscape Communications Corp.’s stock-market debut, the internet’s coming-out party, was only a month away.
History; it rhymes. Today, a wave of enthusiasm for the next revolution, artificial intelligence, has turned the S&P 500 into S&P 5,000. Semiconductor superpower Nvidia Corp.’s market value alone is now bigger than the entire energy sector.