A significant change is coming for some of the technology sector’s most prominent companies.
What’s about to unfold on July 14th could have a profound effect on companies like Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), along with several other names, and could ripple throughout the tech sector.
If you own or are considering a position in any tech stocks, mark this date on your calendar.
Because this make-or-break event could have a significant impact on your portfolio…
Are tech stocks in for a difficult road ahead?
The market is preparing for a shift as the Nadaq 100 index gets ready to adjust its weighting. Nasdaq announced it would conduct a “special rebalance” of its Nasdaq 100 to reduce the degree to which certain stocks determine the index’s performance.
The index weighting methodology spells out that a rebalancing will take place when any group of stocks amounts to more than 48% of the index. Tech giants Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta are the current dominators after surging in the year’s first half.
The adjustment will be based on shares outstanding as of July 3, with changes set to be announced on July 14 and taking effect before the market opens on July 24. Exchange-traded funds (EFTs) and mutual funds tracking the index could be impacted. The Nasdaq 100 is the basis for some of the world’s most heavily traded products, such as the Invesco QQQ ETF (QQQ).
Experts see this as another indication of the top-heavy quality of the current market. As such, short-term volatility among prominent tech stocks could be the beginning of a significant rebalancing away from big tech in the second half.
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