WILL THIS TREND CONTINUE?
The global pandemic has accelerated a long-term trend of technology playing a greater role in society. A recent Fortune 500 CEO survey depicted that 75% of companies plan to elevate technology spending in the future, which will add to the valuations and earnings potential of these tech giants whilst also increasing the sector’s weighting 
. This suggests that technology’s dominance in the index, and its positive contribution to the S&P’s valuation will be sustained.
Contrastingly, proposed international taxation laws may compromise these companies’ future earnings. The US is currently threatening to impose tariffs on European countries seeking to levy new taxes on their tech giants. Whilst discussions have reached an ‘impasse’ for now, if taxes are imposed, technology’s weighting could decrease from the current 25% 
. The outcome of tariffs being imposed is also dependent on political tactics.
The second largest sector in the S&P 500 which has been a key contributor to this rally is healthcare. Key high performing stocks in this index include Johnson & Johnson, United Health, Merck and Pfizer. Companies have seen revenue and earnings growth from pausing operations and switching production to high demand PPE (personal protective equipment). For instance, Eli Lilly has seen $250m extra sales in the first quarter as a result of PPE stockpiling due to the pandemic which added $18.8bn to its market capitalisation within the index 
. This has provided a boost to many large US healthcare companies’ stock prices and thus their valuations within the index.
Additionally, another large driver of these companies’ stock price arose from investors betting on potential treatments or Covid vaccines. CNBC’s Covid-19 Index, which tracks 29 companies developing these treatments, including dominant health care stocks such as Johnson & Johnson has approximately mirrored the S&P’s movements. This highlights how instrumental the anticipation of a vaccine has been in spurring the rally