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U.S. stocks are stumbling this month amid worries over stretched valuations, with the S&P 500’s concentration in Big Tech making it
vulnerable to pullbacks like the one seen Thursday.
Most of the Big Tech stocks known as the Magnificent Seven trade at lofty valuations well above the highly valued S&P 500 — which has heavy exposure to the group. Yardeni Research tracked Big Tech’s forward price-to-earnings ratios for the next 12 months in the chart below, including a comparison of the valuation multiple for the S&P 500, in a Nov. 5 note.
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