Nvidia Helped Stocks Rebound, But This Summer’s Broadening Theme Never Went Away

The S&P 500 (^GSPC) is back near its all-time highs.

A recent rally in the technology sector, including a nearly 30% rise in Nvidia (NVDA), has helped push the index up more than 7% since its Aug. 5 low.

During that period, the “Magnificent Seven” tech stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA) and Nvidia (NVDA) — have added more than $1.4 trillion in market capitalization, nearly half of the S&P 500’s $3.2 trillion market cap gain since Aug. 5.

After a massive decline in July, the recent surge has helped the Nasdaq Composite (^IXIC) break out of the correction in 11 days, marking its shortest correction since October 2011.

Ed Clissold, head of U.S. strategy at Ned Davis Research, recently told Yahoo Finance that given how tech led losses during the downturn, “it makes sense that they would bounce back.”

And now, some of the biggest names in the sector are hovering near 52-week highs ahead of a crucial earnings report from Nvidia on August 28.

During the second-quarter earnings season, some of Nvidia’s AI-powered rivals delivered mixed results that struggled to meet Wall Street expectations.

“This would be the ninth consecutive day of gains for the S&P,” Dan Niles, founder of Niles Investment Management, told Yahoo Finance on Tuesday. “It’s the longest streak since 2004. I don’t necessarily see Nvidia being that different.”

“But I think if you don’t worry about what’s going to happen tomorrow and you think about it over a period of years, things should work out pretty well.”

And while AI trading once again led the latest leg of the market rally, there were also promising developments taking place beneath the surface.

The S&P 500 market-cap-weighted index (^SPXEW), which is less influenced than the S&P market-cap-weighted index by moves in big tech companies, just hit a new record high. Sectors such as utilities (XLU), consumer staples (XLP) and health care (XLV) are now at 52-week highs, while financials (XLF) are currently at a record high.

“We think this rally has been very healthy,” Abby Yoder, U.S. equity strategist at JPMorgan, told Yahoo Finance. “It’s broadened. The margin of upside is the best it’s been since last summer. In terms of participation in different sectors and different names.”

Still, the S&P 500 is up nearly 18% this year, outpacing the equal-weight index’s nearly 9% gain this year.

“The reality is that in bull markets, all sectors are generally up,” said Kevin Gordon, senior investment strategist at Charles Schwab.

The story continues

In July, Gordon’s team at Schwab noted in Yahoo Finance’s Chartbook that the number of S&P 500 companies outperforming the index on a two-month rolling basis had fallen to a record low.

Since then, the situation has completely changed. As of Monday’s close, about 58% of S&P 500 members were outperforming…