Why tech stocks are leading the gain while utilities and consumer staples are underperforming
Tech stocks were leading the stock market’s gains again on Monday, as enthusiasm around artificial intelligence resumes.
“This is a reminder to the market that the artificial-intelligence trend is alive and well,” Jeffrey Buchbinder, chief equity strategist at LPL Financial, said in a phone interview.
“We think what’s happening today is a better representation of what the market should be doing” compared with the last few trading days of 2024, when the market pulled back, Buchbinder said. “When you have a solid economy, solid earnings growth, and there’s the potential for more business-friendly policy out of Washington, those are the ingredients for a higher stock market,” he added.
On the other hand, Buchbinder said he would be careful with interest-rate-sensitive sectors right now, including consumer staples, utilities and real estate, as concerns around inflation may continue to put upward pressure on interest rates. Investors have been worried that Donald Trump’s potential policies on tariffs may push prices up.