The Technology Select Sector SPDR Fund (XLK) has spearheaded much of this year's market gains, sparking investor concerns about market concentration. Charles Schwab senior investment strategist and director Kevin Gordon joins Morning Brief to offer insights into market outlooks.

Gordon believes that concentration "is not necessarily the bad part." He elaborates that the real concern arises when a small number of stocks drive the market to all-time highs while participation from the broader index wanes. The strategist notes this is the current dynamic within the S&P 500 (^GSPC), cautioning that "if that persists into the second half of the year, that's where we'd see more of the risks."

Addressing investors' continued focus on the "Magnificent Seven" stocks despite concentration concerns, Gordon observes, "It seems that in the post-pandemic world ... investors have been willing to treat those areas of the market as defense."

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This post was written by Angel Smith