The US stock market showed gains on Monday after a sharp decline, but remains under pressure from negative signals.
Market Stocks Recover After Sharp Decline
Stocks in the US market rose on Monday despite technical troubles in the Dow Jones index and a substantial drop in Berkshire Hathaway shares. After last week’s sell-off fueled by fears of the US economy and new tariffs by President Donald Trump, the Dow jumped 585.06 points, or 1.34%, closing at 44,173.64, wiping out Friday's losses. The S&P 500 climbed 1.47%, while the Nasdaq Composite surged 1.95%, leading the recovery across major indexes.
Berkshire Hathaway: Weak Results and No Buybacks
Berkshire Hathaway shares declined after the company reported a 4% year-over-year decrease in operating earnings for the second quarter, totaling $11.16 billion. While most segments improved, underwriting losses in insurance pulled overall results down. The stock dropped over 2% on Monday and is down approximately 15% from its all-time high in May. Warren Buffett confirmed that Greg Abel will take over as CEO at the end of 2025. Berkshire did not repurchase any shares in the first half of the year and through July 21, which caught market attention.
Tech Stocks Dominate the Market
Technology stocks now comprise 55% of the market share, the highest level ever recorded. This figure has doubled since the 2008 financial crisis and exceeds the ~50% tech share observed during the Dot-Com Bubble in 2000. While the tech sector continues to grow, defensive stocks have dropped to ~17%, an all-time low, while traditional cyclicals like industrials and financials account for just ~28% of the market. This imbalance raises concerns that a few major names are doing the heavy lifting as the rest of the market struggles.
Despite the gains in stocks on Monday, the overall situation in the market remains tense due to technical breakdowns in the indexes and other negative economic factors.
