# The Truth About Big Tech’s Effect on the Market

Canonical: https://stocksurgedaily.com/the-truth-about-big-techs-effect-on-the-market/

Hey, Ross here:

Despite the big move down right after Powell’s speech last Wednesday, markets recovered – and the S&P 500 closed at yet another record high for the third week in a row.

Yes, Big Tech made an outsized contribution to this upward move – with Meta adding $200 billion in market cap in a single day.

But as today’s chart shows, it’s much more than just Big Tech.

**Chart of the Day**

![](https://lh7-us.googleusercontent.com/yRKiLvt8GkdgCoS2BQyPa-OLhm48QZBcrDqvemc__-bZtw1vVEbDn9KwbZg6xrgdvVVVubQ1YDRUF3NUcngPV_vtlOzUfYK3dfCcWHosPp30FGqG18bMg8TKT3Uba8jUf5zg2IWRwDqcerO7-VkfYyo)

This is the Equal-Weight S&P 500 Index – which basically shows us how the S&P 500 would look if all 500 stocks were weighted equally instead of by market cap.

In effect, it places the biggest stocks on the S&P 500 on equal footing as the smallest ones.

If Big Tech was largely responsible for the S&P 500’s blistering performance lately, we would expect to see the Equal-Weight S&P 500 Index and the actual S&P 500 index moving in opposite directions.

But as you can see, that is not the case.

While it hasn’t quite matched the recent upward pattern of the S&P 500, it has not diverged from it either. It’s still at 21-month highs.

So yes – while Big Tech is having an outsized effect on the market _(nothing new here)_ – that’s just part of the bigger story.

Plus, there’s also a hidden pattern forming in the Equal-Weight S&P 500 Index – which I explain in the Insight of the Day. 

Most don’t pay attention to this index in the first place – so most won’t notice it.

Their loss.

**Insight of the Day**

**If you look at the recent price action of the Equal-Weight S&P 500 Index, you’ll notice a classic consolidation pattern – something that often precedes a big breakout.**

Look at the chart of the Equal-Weight S&P 500 Index again. See the classic consolidation pattern forming?

![](https://lh7-us.googleusercontent.com/aK3hiqQ2CzQs-p4HGmZSI21YxVmVdRiwj3MgjdxUcu73Zq20f89Hw1w5I1noA5a8dzrZhn-FAQFa8RpYy2Ez6PPW06Ss0OXCCY9L-hsTcKgOQ5z-TF-05E91cNXKcjDuczminb14zd4GeIecsTqUoP8)

If there’s a breakout in the index, it means the smaller – and largely ignored – S&P 500 stocks are also breaking out.

And that’s an opportunity – because their profit potential is far greater than those of the trillion-dollar Big Tech companies.

And it’s not like you have to ignore tech entirely.

In fact, many of these smaller stocks are tech companies – just ones most have never heard of…

A prime example is **[my #1 AI stock – which you can get all the details on by clicking here.](https://gamemasterinvesting.com/war-room/vsl/?tambid=22824)**

![](/wp-content/uploads/2024/01/unnamed-12.png)

**Ross Givens**  
Editor, _Stock Surge Daily_