What Spooked the S&P 500? It Wasn’t the Trade War
A closer inspection of the recent 10% correction indicates the freakout was more about Big Tech than Trump’s tariffs.
Getting into it.
Photographer: Alex Kraus/Bloomberg
The US stock market is on edge. The S&P 500’s recent 10% correction has investors worried, though a highly uncertain policy environment and an unusually top-heavy market obscure just what is spooking stocks.
Two pain points come to mind, one in plain sight and the other harder to see. The obvious one is the barrage of pronouncements from the White House, some of which affect companies directly, most notably trade policy. The business environment has become so tense, in fact, that even typically apolitical corporate executives are starting to grumble about the administration’s economic agenda.
The other vulnerability is the S&P 500’s big bet on the Magnificent Seven, the technology behemoths that account for nearly a third of the index. Just as their astounding growth boosted the market for years, a slowdown would be a drag.