Since the beginning of the year, the Nasdaq 100 has been the stock-market darling. All indexes opened higher following the New Years Day break, but since then, the Nasdaq has been making new all-time highs seemingly every minute. From the January 3 through Wednesday’s close, it was up 2.83% in just 7 days. Put in perspective, that doesn't seem too fast or an overheated response. Just a steady grind higher.
But the chart below shows this move to in fact be unusual. The chart shows the Nasdaq 100 performance along with the Dow Jones Industrial Average and the S&P 500. The latter two indexes have moved nearly sideways during this 7-day run-up in the Nasdaq 100. They have had a few small gains and small pullbacks, but both are up a fraction of what the Nasdaq has moved.
One reason could certainly be that the news cycle has been pulling a lot of large-cap stocks into the story. Uncertainly is not a time to buy these names, whether the discussion is real or imagined. Or it could just be normal rotation within the stock market that occurs during a bull run. This is a very short-term picture. But pulling back to a longer view shows that the Dow and S&P are just consolidating major moves higher. No sign of pain or caution.
Rotation seems a safe explanation for now.