Investors are looking at the wrong tech stocks: Chart of the Day
Small-cap tech is leaving Big Tech behind.
The Invesco S&P SmallCap Information Technology ETF (PSCT) closed at a fresh all-time high on Wednesday after the Iran “truce,” extending a move that has quietly left big-cap tech in the dust.
The chart tells the story: PSCT began pulling away from the large-cap tech (XLK) in late 2025, and that gap has only widened in 2026.
TrendLabs founder J.C. Parets had flagged that divergence even before Wednesday’s surge.
In an interview on Yahoo Finance’s Market Domination, Parets said large-cap tech “has been struggling.” He added, “[It] hasn’t gone anywhere in quite some time,” and meanwhile, “mid-cap tech and small-cap tech look great.”
He pointed out that when investors say tech is weak, they’re often talking about a handful of megacaps, while hardware, semiconductors, and smaller tech names have been holding up well.
There don’t appear to be any obvious pure-play mid-cap tech ETFs, but nearby growth proxies are pressing toward highs too. The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) and Invesco S&P MidCap 400 Pure Growth ETF (RFG) are both within striking distance of all-time highs.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
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