Will Tech Stocks Take Off This Summer?

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Will Tech Stocks Take Off This Summer?

Among the major U.S. equity-based exchange-traded funds (ETFs), 2019 has largely been a battle for dominance between small-caps and tech. In January, small-caps jumped out to a big lead, as the iShares Russell 2000 ETF (IWM) began racking up outsized gains relative to the benchmark SPDR S&P 500 ETF (SPY). That small-cap dominance persisted through mid-March, when the tables turned -- and suddenly, the tech-loaded Invesco QQQ Trust (QQQ) broke away from its tight relationship with SPY to surge higher, just as IWM cooled its jets.

All three of these equity ETFs have pulled back during the month of May, but QQQ is maintaining its year-to-date lead over IWM and SPY by a few percentage points, as of this writing. However, as we draw closer to the unofficial start of summer trading, the last decade's worth of seasonality data suggests that this year's ongoing IWM vs. QQQ power struggle is far from over.

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