US Equities (^GSPC, ^DJI, ^IXIC) closed slightly lower for the week after originally seeing gains. Many eyes have been on the tech-heavy S&P 500 as names like Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), and Meta (META) all cooled this week, suggesting a possible broadening of the market rally.
Yahoo Finance Head of News Myles Udland and Markets Reporter Josh Schafer join the Live show to discuss the best-performing groups of the week and whether the momentum around the tech stocks merits comparison to 1999.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- The S&P 500 down about a tenth of 1% when all was said and done on the week. Yahoo Finance's Myles Udland and Josh Schafer are joining us now with their top takeaways of the trading week. Guys, who wants to start? Myles, you want to start?
MYLES UDLAND: Well, I'll piggyback off what you guys were just talking about. Because I think today was sort of a reversal of what worked in 2024. We mentioned the chip names that were down, Marvell really catalyzing that move, a smaller name kind of in that space. But you kind of went through the tape as well.
Apple was higher. It's been very popular to hate that stock so far this year. And I think what's interesting on a weekly basis, looking at the Magnificent Seven trade, Nvidia was the only one that was doing any work. And I know that there's a little bit of concern. And Josh, we were talking about this before, about, is this too-- I mean, it's not new, right? Is it too concentrated? What's the next move? Where are we going to go?
But I think seeing names like Microsoft, Apple down a couple percent over the last week, Tesla down double-digit percentages over the last week, Meta, Google not really doing anything-- and you know, Meta has really been-- because Nvidia is like its own story. Meta, to me, has been the most impressive member of the Mag Seven. And to see those names cool off this week was interesting to see.
JOSH SCHAFER: But then you take a look at the broad index, right, and the S&P 500 is basically flat. So to me, then, the other part of that, Myles, that was kind of a broad takeaway from the week was, well, what held us up? Because when you look at some of those stocks struggling, you could argue Nvidia, for the week, maybe held it up. But also, we've started to see a little bit of the broadening of the rally, right?
We were talking about this yesterday, Julie and Josh, with the equal-weighted S&P 500 hitting its first 52-week high in about two years. And then, you look at just the market action today. So we had the sell-off broadly, right? And you saw tech lead that. The Russell 2000 held up relatively well. I think it might have ended up finishing slightly positive.
The S&P 500, equal-weight, also outperformed today-- outperformed the index, I should say. And that's what's been happening over the last month. So it's been interesting just to start to see, maybe, a little bit of rotation into some of the other names outside of tech.
- You want to guess what the best-performing group on the week was? Anybody want to guess--
MYLES UDLAND: In the S&P?
- --if you haven't looked at my screen.
MYLES UDLAND: I think-- I will guess that it was regional banks.
- No? It wasn't regional banks.
JOSH SCHAFER: I got nothing. Financials.
- Utility-- utilities. Utilities.
MYLES UDLAND: OK, I was going to say, fixed income had a good week.
- Fixed income-- fixed income had a good week, exactly. So we saw-- we saw about a 10-basis-point drop in the 10-year yield. And yes, we tend to see things like utilities and real estate, which was another outperformer in the week, go up when that happens. So that seemed to be what was happening as we still have people kind of-- people decreasing, even more, their bets that the Fed is going to cut a lot of this.
MYLES UDLAND: I just realized I didn't guess an S&P sector, so that's embarrassing.
- Well, regional banks-- regional banks is--
MYLES UDLAND: That's even worse.
- --a subsector.
MYLES UDLAND: Yeah, I know.
- Financials were higher on the week. I'll give you that.
MYLES UDLAND: Well, I mean, I was looking at-- I had a regional bank take here. No, off of New York Community Bank-- I mean, it's-- I think it's at this moment-- and Jared Blikre's been talking about this-- financials have been a stealth outperformer over the-- industrials, financials have really been where a lot of that action has been in the context of a broadening market rally.
And you can look to the Russell for some of that. You can look to the equal-weighted S&P for some of that. And I think you could even just look as simple as, well, when Meta stops going up, what else is there? And the market being flat on that kind of action shows you there's a bunch of other stuff.
- Yeah.
JOSH SCHAFER: Well, the other thing we were thinking about too when we-- Myles and I came up with three broad takeaways, guys. We put a lot of effort into our broad takeaways.
- How far along we in the-- is this-- are we on three?
JOSH SCHAFER: Well, we went-- so it's interesting. We went one--
- We haven't started. We haven't even started.
JOSH SCHAFER: We went 1, 3. Now I want to get to 2.
- Yeah, we went 1 to 3.
JOSH SCHAFER: So we got to get to 2, the macro hot takes cooled. But the interesting part of the week when you think about coming into this, one of the things we were sort of-- I guess, the risk to the market this week, the risk to the rally, right, was, for one, Federal Reserve Chair Jay Powell is going to talk for about six hours. That's always going to make markets nervous. What's he going to say about rates? And it seemed like we largely survived that with kind of the same-- we leave the same way we entered, right?
We still think maybe three to four cuts this year. Cuts probably start in June, based on market pricing, basically unchanged from where we were a week ago. If anything, maybe the inflation story got a little bit better, slightly, with some of the labor data today. That's what economists were saying. So overall, the risk that we were talking about-- Josh, we were talking about this yesterday. What are the risks? What's going to bring us down? Nothing really came, from a macro perspective, for us this week. So I think that's--
- CPI next week.
JOSH SCHAFER: CPI next week, right? So what happens on that print? I don't know. Maybe you know.
- I don't know. You know, another one I want to do-- I want-- I don't know. I don't know what's coming. I want to get your take as two guys who read through a lot of research notes now. Because I think some of the commentary on valuation is also really interesting in that you see really well-respected strategists making the argument that, well, you can't compare this market to past markets. It's a different economy. It's different companies. We've gone from industrial to digital.
And I'm wondering what you make of that, Myles. Do you-- I could see how, some people, maybe that gets you a little nervous. Like, that sounds like someone trying to justify things getting stretched. Or no? Do you buy it?
MYLES UDLAND: Well, no one wants to hear this time is different. No one wants to hear about how these timeless rules of investing like your P/E ratios don't apply. I think the margin profile of current companies-- Josh flagged a note earlier today about Citi looking at free cash flow on an index-level basis. So you're finding all these other ways to slice that loaf of bread, or whatever you want to call it, on valuations.
But I think there's been a little bit, like, doth protesteth too much around the notion of this is not 1999. And I'm not-- look, I'm no bear. But I'm just-- there's just a lot of people saying 1999 a lot of the time. And you know they're responding to clients. But do we need to talk about it, I mean, that much? Come on. So, anyway--
- Yeah, well, it was interesting to hear Jordan Klein of Mizuho just a little while ago. We were talking to him about tech. And he just was like, it just feels like we should be worried, right?
MYLES UDLAND: Look, we would have sat here four years ago and been like, remember, semiconductors are a cyclical trade. And now, apparently, it's fine that Nvidia goes up every day.
- Well, there are still some people who say they're still cyclical, and we're ignoring that at our peril. But I don't know.
MYLES UDLAND: Other people say that. We're just-- you know, we're just reporting.
- Thanks for being here, guys. Fun to talk to both of you, Myles and Josh.