Concerns over the Federal Reserve’s plans to raise interest rates several times this year to combat high inflation and rising geopolitical tensions between Russia and the U.S. over Ukraine propelled a market sell-off last month. However, strong 2021 fourth-quarter GDP growth and an unexpected decline in jobless claims in January helped the benchmark indexes rebound slightly from their lows. Furthermore, impressive fourth-quarter corporate earnings added to the positives.
While not all market participants rebounded based on the positives, some mega-cap stocks outperformed the broader market. With market capitalizations of more than $200 billion, mega-cap stocks usually perform better than smaller stocks amid market volatility because of their companies’ market dominance and financial stability. Investors’ interest in mega-cap tech stocks is evident in the Vanguard Mega Cap ETF’s (MGC) 7.9% returns over the past nine months.
