Yahoo Finance

The S&P 500 just chalking up its best May in 35 years. The reason, two words, magnificent seven. Yes, indeed, they are back and really contributing once again. Remember the debate that we sort of continually have, uh, does the S&P 500 rely too much on large cap tech for its gains? Well, I'm not going to opine on that, but it definitely accounted for a lot of the gains in May, 62% to be exact. That is according to research from DataTrek. And here is the breakdown in index points of the contribution each of the components made. Now, Apple did not contribute. It actually took away a tenth of a point from the S&P 500 during the month because it was down. But otherwise, we saw big gains and big contributions from likes of Microsoft and even bigger Nvidia. Even Tesla, which as we know has been a, a, a decliner year to date and has been taking away from gains, even it saw the gains in the month. So overall, you get that 62% of the S&P 500 overall in terms of the index point gains that we saw, uh, for, for these large cap tech companies. So it really was a comeback. Another way to look at it is to look at the ETF that tracks these companies, and you see here, and I know Jared Blikre has been looking at this, the two-month chart for these stocks. We can also take a look at the sort of year-to-date to see where we are and where we have come. So we've made this round trip, but we haven't made it all the way back to where we were at the beginning of the year. We're pretty much flat. And we've been talking to investors about this. Are these stocks now priced correctly given the outlook? Should people get in here? Of course, there are is a large range of opinions. We talked to Kenny Paul Carry, Paul Carry earlier on the show and he said, in terms of stocks broadly here, you still want to be cautious because of some of the trade negotiations, the uncertainty about how that's going to turn out. We also talked to Ted Mortenson of Baird, and he says we really want to pay close attention to these companies' second quarter and third quarter numbers, the ones that really start to incorporate the effect of the tariffs as as they have started to, um, impact their bottom line. So that's something to keep an eye on here to see where the magnificent 7 go from here. One of the things Mortenson pointed out, however, is that capex remains intact. In other words, big cap tech continues to spend and continues to spend on itself. Nvidia, as we know, has been one of the primary beneficiaries.