US Tech Giants' Earnings Growth Slows, S&P 500 Index Rally at Risk

BlockBeats News, February 6th, the seven giants of the US stock market have boosted the earnings growth and stock returns of the S&P 500 index, accounting for about one-third of the benchmark index. Over the past two years, over half of this index's gains have come from these companies, but with rising expenses, their profit growth is slowing down.

Looking at the forward price-to-earnings ratio, the seven giants are trading at a 40% premium to the overall S&P 500 index, posing a threat to their high valuation. This premium level has been narrowing, falling below the peak of 70% in 2023. Industry research data shows that the year-over-year profit growth of these giants peaked at the end of 2023 and is expected to slow down for the fifth consecutive quarter.

Kristian Heugh, manager of the Morgan Stanley Global Opportunity Fund, stated that the year-over-year profit growth of the seven giants is declining "significantly," while other components of the S&P 500 index are improving. (Jinse Finance)