Healthcare Stocks Hit A Speed Bump, But Most TECH Stocks Roll On

Dow (DIA) is down 2.3% month to date

• The XLV was down 2.52% to $167, reflecting the weighting of large-cap biopharma drugs in the ETF; the IBB was down 2.17% to the $207 level.

• The XLK was up only 0.32%, but other tech sectors did better but were volatile; SMH up 1.19%, NVDA down 2%, AMD and DELL strong.

• Energy was up 1.1% and is the Sector to watch as the War continues to Rage on.

Healthcare and biotech stocks were weak yesterday, with the XBI down 1.15% and the larger-cap-weighted IBB down even more, at 2.37%.  This performance divergence may be due to two large-cap stocks that had bad news: AMGN off 10% to the $393 level and Novartis (NVS) off 13.93%. We have a small position in NVS and have no position in AMGN.

• Novartis (NVS) had a really bad day with two failures in the clinic: one for del-desiran for a rare neuromuscular disease and another drug candidate, pelacarsen, that failed to reduce heart attacks and strokes.

• The Novartis trial reverberated to the AMGEN trial as investors weighed concerns that their cholesterol drug olppsiran could have issues. BMO downgraded the stock on market performance.

In case you haven’t looked at the weighting of the S&P 500, here are the latest as of 9/4/26

• I knew technology was high, but 38.2% wow!

• Financials are the #2 weighting at 12%.

• Healthcare down to 9.2%.

• Energy is only 3.5%.

Here is another breakdown of the S&P 500 (GICS) as of 9/5/26:

• TECH is still the leader but at 33.2%

• Other values are close to the prior list.

Here is a breakdown of one alternate weighted index, an S&P 500 Equal Weighted Index:

• In the short term, the S&P 500 is the obvious winner. However, in the long term, the results aren’t as clear.

• One index that one should keep in mind is the Russell 2000 (IWM), which is up 19.71% YTD and 21.68% over one year. The IWM has lately correlated with small-cap biotech performance, with a 16.4% weighting in “health technology” stocks.

• On any given day, you can look at the breadth of performance of SMID biotechs within the IWM.