A Leadership Toggle?

Is Policy Accommodation Finally Bringing a Leadership Shift?

During the last 35 years, leadership within the U.S. stock market has regularly oscillated between the technology sector (new era stocks) and broader market plays (including small caps, value stocks, the equal-weighted S&P 500 index, and cyclical sectors). As demonstrated in chart 1, the first half of the 1990s was dominated by broader market plays while technology dominated during the second half of the 1990s. During the next decade, broader market stocks again took leadership once new era stocks collapsed in 2000 and then languished until about 2014. In the most recent decade, new era has again driven the stock market while nearly vanquishing broader market plays.