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US stocks (^GSPC, ^IXIC, ^DJI) move into positive territory in an attempt to rebound from Monday's DeepSeek AI-driven tech sell-off, with the tech sector seeing its worst day since 2020.
Northwestern Mutual chief portfolio manager Matt Stucky joins Wealth to advise investors to diversify beyond large-cap stocks, which dominate the market.
"Look... I think you know just yesterday's reaction in the markets gives you a flavor for some of the concentration that is in markets... And so if you're looking to navigate choppier waters like this, I think investors would be well served to embrace a little bit of diversification in your portfolio," Stucky says.
Stucky explains "there's a big investment universe out there outside of just US large caps," while noting "if you look at just the top ten names in that index [which] represent 40% of the market cap, and as we found out yesterday, a lot of that performance is tied to the AI investment theme."
Nvidia (NVDA) notably lost nearly $600 billion in market cap from yesterday's sell-off.
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Additionally, Stucky highlights this week's Federal Reserve FOMC meeting, starting today and concluding on Wednesday, which could signal a focus on disinflation. He suggests that if inflation trends continue to improve, further interest rate easing from the Fed could spur broader market growth.
To watch more expert insights and analysis on the latest market action, check out more Wealth! here.
This post was written by Josh Lynch