I have been checking out the performance of both the NASDAQ and the S&P 500, but was unable to understand / google why. Especially in the 2nd quarter of 2020, NASDAQ is doing way better, although the top 10 constituents in both indices have a large overlap. I can only assume that the S&P performance is dragged down by other non-tech stocks in the index.
The energy and financial sectors have been a huge drag on the S&P 500, whereas tech stocks have done well, supposedly because they are less impacted by the pandemic or might even benefit from it.
Investors’ Love of Tech Drives Booming Market Rally (WSJ June 7th, 2020)
The faith investors have in fast-growing tech firms and historic stimulus measures by the world’s central banks and governments helps explain how stocks have shaken off the worst U.S. economic contraction and civil unrest in decades. Many internet stocks favored by individuals are also popular for hedge funds and institutional investors seeking assets with attractive growth prospects. [...]
Some market professionals remain concerned that certain tech stocks are overvalued and their shares will suffer if the economic fallout from the pandemic spreads in unexpected directions. But investors from venerable Wall Street hedge-fund managers to small traders on popular trading apps remain resolute that these tech companies will continue growing.
Their reasoning: The coronavirus and remote working are accelerating many trends—from cloud computing to digital payments—that they expect to persist beyond the pandemic.