Tech's Weight Loss in the S&P 493
The Technology sector now has a weighting of 34.45% in the S&P 500, which is basically near record-highs only seen at the peak of the Dot Com Bubble in early 2000. Below is a pie chart showing current S&P 500 sector weights. Tech's weighting is now more than 20 percentage points higher than Financials (13.53%), which is the second largest sector in the index.
Things look significantly different if we remove the mega-cap Mag 7 stocks (AAPL, AMZN, META, MSFT, NVDA, TSLA) and only look at the "S&P 493." As shown in the table and pie chart below, Tech is no longer the largest sector when looking at the S&P 500 ex Mag 7. Financials actually takes the top spot with a 21.1% weighting in the S&P 493. Tech moves down to second with a weighting of 19.4%, followed by Health Care (12.9%) and Industrials (12.5%) in third and fourth.
Consumer Discretionary and Communication Services also become quite a bit smaller when looking at their weightings in the S&P 493. Consumer Discretionary is the 3rd largest sector in the S&P 500 at 10.4%, but it ranks as just the 6th largest in the S&P 493 at 7.2%. Communication Services sees an even bigger drop when going from the S&P 500 to S&P 493, falling from 9.9% down to 4.8%.
On the flip side, Consumer Staples jumps from the 7th largest sector in the S&P 500 to the 5th largest sector when looking at the S&P 500 ex Mag 7.
Similar to how large-cap valuations look a lot less excessive when removing the Mag 7 from the equation, sector weightings also become a lot more balanced.
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