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Stock market gains powered by just a few stocks

Apple, Nvidia, Alphabet, Microsoft, and Amazon have seen their shares skyrocket this year. In fact, the gains in just a handful of stocks have powered the major indexes higher. Yahoo Finance's Jared Blikre explains.

Video transcript

PRAS SUBRAMANIAN: Take a closer look at the markets. How the markets have done this year, it's all about on the back of a handful of names, just like Rob has mentioned. Yahoo Finance's data guru, Jared Blikre, is here with more, giving us a closer look.

JARED BLIKRE: The data guru-- I'll take it. Well, let's take a look at the results for today in the majors. Then we'll drill out down into some of the components. This is a reflection of what's happened this year. NASDAQ up 1 and 1/2%, Dow lagging up about half of that, over 3/4 of a percent, S&P 500 somewhere in the middle. And you take a look at what's happened today versus what has happened in the entire year in the NASDAQ 100. Look at this, Nvidia up 5% today alone. Year to date, that total is now up to 172%. Apple's up almost 40%, Amazon closing in on 50, Meta above 125%.

But you look outside some of these names-- I'll throw Tesla and Microsoft in there, too. You look outside some of these names, and you get a ton of concentration. And this has been getting a lot of press recently. I've talked about it over the last week or so. Here is the NASDAQ 100. It has gained $4.2 trillion in market cap this year. And guess what? The top seven have accounted for 3 and 1/2, 3.6 trillion of that. So Apple has accounted for 18% of that, something like $700 or $800 billion, more than the bottom 93 of the NASDAQ 100 in total.

So this has important ramifications for the market. And I just want to talk about the bond market, what's happening with the Fed and the debt ceiling, and how it has implications for, guess what, the jobs report tomorrow, CPI in two weeks, the Fed meeting in two weeks. It's all coming together right here, right now. So here's a 10-year T-note yield. It has been trending down over the last few days. And that's after being under-- after rising during the month of May.

Also want to point out the US dollar index was largely rising during the month of May, and it's finally backing off today. These were headwinds for the tech trade. Nevertheless, we saw mega caps doing really nicely. So if they did well in this environment, shouldn't they be able to do even better if we have rates coming down? If we have the dollar coming down, well, in theory, yes, but it also has to do with the debt ceiling.

And once all these extraordinary measures are done with, once we have a normalization of this situation, the Treasury is going to crank up the debt issuance press again, which is the opposite of money printing. And guess what? They're going to take money out of the system, out of the economy to the tune of, what, a half a trillion dollars, maybe a trillion dollars. Depends on how far you go out. That is a huge headwind in the market. There is not a lot of liquidity.

So if we have a huge outside print tomorrow in the jobs market, either to the upside or the downside, this is going to have a disproportionate effect and ripple effect on all the markets. Imagine what happens if we have a negative print on payrolls? Well, that would be hugely risk-on, right? But amid this low liquidity, it's not going to be pretty. We can see some pretty one-sided trades, or at least, I can see the potential for some pretty one-sided trades throughout the summer.

And it all gets down to the low liquidity environment and the fact that it is the summer. Everything's marching in one direction. And if we get something in the opposite direction or a red herring up here, out there, guess what? It's going to come back and it's going to haunt the equities market on a disproportionately large basis.

SEANA SMITH: It sounds like investors maybe need to tread a little bit carefully and keep some of those risks in mind. Jared Blikre, great stuff. Thanks.