Incredible Impact Of Trillion-Dollar Stocks On S&P 500 Gains In 2024

End of month window dressing helped the stock market turn a nasty down day into solid gains. The Dow Jones Industrial Average had its best day in 2024, gaining 570 points. The only laggard was the NASDAQ which closed flat to lower on the back of Dell Technologies (DELL) earnings and weakness in the semiconductor sector.

For investors, the headline numbers in 2024 are impressive. The S&P 500 is up 11% on the year. However, if you look under the hood there are issues with this whopping gain.

Amazon.com (AMZN), Alphabet (GOOGL), Nvidia (NVDA), Apple Inc. (AAPL) and Microsoft Corp. (MSFT) are up 27% in 2024. Based on their multi-trillion-Dollar valuation, these mega caps have had an outsized impact on the indexes.

If investors strip out those five companies (AMZN, GOOGL, NVDA, AAPL, MSFT), the S&P 500 is only up 6% for the year. Stripping out Meta Platforms (META), the number drops even more. Remove the semiconductors in total and the S&P 500 is barely positive in 2024.

While the head line numbers are pumped via the mainstream media, smart investors should take close note of how a handful of stocks are giving a false impression about the strength of the market.