uploads///Technology Sector in February

What’s the Correlation between S&P 500 and the Technology Sector?


Mar. 6 2018, Updated 9:02 a.m. ET

Technology sector in February 2018

Major sectors of the S&P 500 Index (SPX-INDEX) contributed to the S&P 500 Index’s sharp drop in February 2018. However, the technology sector saw only a marginal drop, which helped control the index’s overall fall.

The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the US technology sector, fell marginally by 0.4% in February 2018. However, the technology sector remained the top performer of the S&P 500 Index with a 34.6% return in 2017. The broader market S&P 500 Index (SPX-INDEX) fell 3.8% in February 2018.

Alphabet (GOOGL), Facebook (FB), and Apple (AAPL) returned -6.6%, -4.5%, and 6.8%, respectively, in February 2018. Some technology stocks’ weaker performances were offset by the stronger performances of other technology stocks during the month.

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Over the last 14 months, the S&P 500 Index remained highly correlated to the US technology sector. Between January 1, 2017, and March 1, 2018, the correlation between the S&P 500 Index and the technology sector ETF (XLK) stood at 0.98. The higher positive correlation between these two indexes is indicating that the S&P 500 index’s performance remained highly dependent on the technology sector during this period.

In the next part of this series, we’ll analyze what market volatility is indicating for market movement.


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