The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

S&P 500 growth driven by a few strong performers

Stocks-market.jpg / Kaptan Ravi Thakka / Wikimedia Commons / CC BY-SA 4.0 Deed
The stock market is often used to determine how companies and the economy is doing.

On Feb. 23, Nvidia achieved a market cap of $2 trillion. This achievement was important for other companies as well. Nvidia’s growth was responsible for 28% of all the gains of the Standard and Poor’s 500, or the S&P 500, an index encompassing about 80% of the capital in all public American companies. Combined with Meta, Microsoft, and Amazon, the four companies have been responsible for 60% of the S&P 500’s gains.

Nvidia’s growth

In 2024, Nvidia’s stock price already increased by 59%, making it the third most valuable company in the U.S. Nvidia’s growth continued the trend last year when it tripled its value in one year. Capitalizing on the surge in artificial intelligence (AI), Nvidia’s business of selling graphics processing units, which are critical to powering AI, allowed it to rapidly grow to become the juggernaut it is today.

Impact on the S&

The growth of larger companies in the S&P 500 has a larger effect on the total price. This leads to the growth that the S&P 500 sees today — just seven stocks make up 30% of the weighting in the S&P 500, and they are responsible for much of the growth of the index as well. These seven stocks have been some of the best performers in the stock market. If the S&P 500 were not weighted, so that all of the 500 companies had an equal effect on the price, the index would have grown 51% less over the past 15 years.

These seven companies have grown by varying amounts this year.

  1. Apple: Down 6%
  2. Microsoft: Up 9%
  3. Alphabet (Google): Down 2%
  4. Amazon: Up 15%
  5. Nvidia: Up 59%
  6. Tesla: Down 20%
  7. Meta (Facebook): Up 37%

(Source: Barron’s stock overview (real-time market data) as of 2/29/24)

If the market is to continue to grow, it will rely primarily on the few strong performers.

“We are at a historic extreme in the amount of money in this very small number of stocks,” said Michael Smith, a senior portfolio manager, earlier this month.

Navigate Left
Navigate Right
About the Contributor
Bowen Yan, Staff Writer
Bowen Yan (Class of 2026) is a staff writer for Scot Scoop. Besides Journalism, he enjoys listening to music, cooking, fashion, and art. He strives to create a positive impact through his journalism.

Comments (0)

We invite comments and responses to our content. Comments that are deemed appropriate and relevant will be published.
All Sort: Newest

Your email address will not be published. Required fields are marked *