Big Tech is losing momentum — is the US30 becoming the better way to trade US stocks?

US technology stocks have lost momentum, but the weakness is far from uniform across the broader market. The Nasdaq-100 fell 6.6% in October as investors reassessed AI spending, valuations and free cash flow, while the Dow Jones Industrial Average gained 1.8%. Nine of the S&P 500’s 11 sectors finished the month higher, showing that investors were rotating rather than simply abandoning US equities.

Mitrade’s US30 tracks the Dow, giving traders a very different exposure from NAS100. Financials account for about 27% of the Dow, followed by technology at 19%, healthcare at 15% and industrials at 14%. Goldman Sachs and Caterpillar alone represent more than 17% of the index, while Microsoft, Amgen, Visa, UnitedHealth and JPMorgan are also among its largest constituents.

That composition has become increasingly relevant as investors move away from the most expensive parts of the AI trade. US30 still contains technology leaders, but stronger banks, healthcare companies and industrial stocks can offset weakness in mega-cap growth in a way that NAS100 cannot.

Explore US30 CFD Trading

Technology fell 6.8% in October and communication services dropped 15.1%, but the weakness stopped there. Energy gained 14%, consumer staples 11.6%, utilities 10.2%, healthcare 9.9% and financials 5.9%. Even the equal-weight S&P 500 rose 5% while the conventional market-cap-weighted index slipped 0.9%.

The pattern suggests that investors are not necessarily becoming bearish on corporate America. Instead, they are becoming less willing to rely on a handful of expensive growth companies to generate most of the market’s returns.

US30 benefits directly from that broadening because its largest weights include businesses whose earnings depend on banking, payments, healthcare, industrial demand and consumer activity. NAS100 remains much more sensitive to expectations around AI spending, cloud growth and semiconductor demand.

The divergence gives traders two increasingly different ways to express a US equity view. Continued rotation into value and established earnings could favour US30, while a renewed surge in AI enthusiasm would probably benefit NAS100 more aggressively.

Financials represent roughly 27% of the Dow, making them its largest sector exposure. Goldman Sachs alone carries a weight above 10%, while Visa, JPMorgan and American Express increase the index’s sensitivity to trading activity, lending, payments and consumer credit.

Recent bank earnings have provided several reasons for investors to revisit the sector. Trading revenues have remained strong, net interest income is still healthy at major lenders and capital-markets activity has shown signs of improvement.

Those companies also face risks if higher borrowing costs weaken loan demand or push credit losses higher, but their earnings are driven by very different forces from the companies leading NAS100. A slowdown in AI spending does not directly reduce Goldman’s trading income or Visa’s payment volumes.

US30 therefore offers much greater exposure to parts of the economy that can perform even when technology valuations are being compressed. If financial earnings remain resilient, the sector can provide meaningful index support because of its unusually large Dow weighting.

Caterpillar is the Dow’s second-largest constituent at just over 7%, giving industrial demand an influence that is largely absent from NAS100. Its exposure spans construction, mining, energy and infrastructure, linking the stock to real-world capital spending rather than mainly to expectations for digital growth. Boeing, Honeywell and other industrial companies expand that exposure further.

Some of the same AI investment worrying technology investors can actually support industrial demand. New data centres require electricity infrastructure, backup power, construction equipment, cooling systems and physical facilities. Spending can therefore shift from companies buying AI chips towards businesses supplying the infrastructure needed to run them.

That provides US30 with an indirect way to participate in the AI buildout without depending as heavily on semiconductor valuations. Industrial companies still face cyclical risks if economic activity weakens, but their earnings can benefit from infrastructure, manufacturing and energy investment even while investors become more cautious about expensive technology shares.

Healthcare gained almost 10% in October and has continued outperforming technology over the past month. The Dow captures that strength through Amgen, UnitedHealth, Johnson & Johnson and Merck, giving US30 roughly 15% exposure to the sector.

Those businesses are driven by drug launches, medical demand, insurance margins and product pipelines rather than the AI capital-spending cycle. Healthcare can therefore provide a separate earnings engine when semiconductor and cloud stocks lose momentum.

Amgen and UnitedHealth are also among the Dow’s largest individual weights, so a sustained healthcare recovery can have a meaningful effect on the index rather than simply providing token diversification.

The recent performance gap illustrates why index construction has become more relevant for traders. Technology has fallen sharply over the past month while healthcare has posted double-digit gains. NAS100 captures much more of the former, while US30 has materially greater exposure to the latter.

US30 should not be mistaken for an index that avoids technology altogether. Microsoft carries roughly 6% of the Dow, while Apple, Nvidia, Amazon and Salesforce also contribute to its performance.

A recovery in Big Tech can therefore lift US30 alongside NAS100, but the Dow is less dependent on those companies doing all the work.

That balance can become useful when investors remain constructive on US equities but less confident that the next leg higher will again be driven almost entirely by AI leaders. US30 can benefit if banks, healthcare and industrial stocks continue participating while technology stabilises.

NAS100 offers the stronger exposure when the view is specifically bullish on AI, semiconductors and mega-cap growth. US30 becomes more relevant when the view is that US market leadership is broadening.

The choice between them is therefore less about which index is permanently superior and more about identifying which part of the market is currently driving returns.

The recent technology pullback has happened despite generally strong corporate earnings. Investors have become more focused on how much companies are spending to generate future AI growth and how quickly that investment will translate into cash flow.

Microsoft, Meta, Alphabet and Amazon are collectively committing hundreds of billions of dollars to data centres, chips and other AI infrastructure. Strong revenue growth can justify that investment, but expensive valuations leave less room for disappointment if margins, free cash flow or guidance weaken.

Companies inside US30 generally face a different valuation test. Goldman Sachs, Caterpillar, JPMorgan and major healthcare groups are judged more heavily on current profits, cash generation, credit conditions or industrial demand.

That does not make them immune to market corrections. It does mean their valuations are less dependent on assumptions about AI profits several years into the future, which can help explain why the Dow has recently held up better during the growth-stock sell-off.

• Financial earnings: Continued strength in trading, payments and credit quality would support the Dow’s largest sector exposure.

• Industrial orders: Caterpillar and other industrial companies can show whether infrastructure and capital spending remain resilient.

• Healthcare earnings: Continued gains across insurers and pharmaceutical companies would reinforce the rotation beyond technology.

• AI sentiment: Microsoft, Nvidia, Apple and Amazon still carry enough weight to benefit US30 if Big Tech rebounds.

• Market breadth: Continued outperformance from the equal-weight S&P 500 would suggest the rally is spreading further beyond mega-cap stocks.

• Valuations: Another compression in expensive technology multiples could favour US30 relative to NAS100 even if the broader US market remains stable.

Traders expecting another strong AI-led rally may find NAS100 the more direct instrument because mega-cap technology, semiconductors and cloud companies dominate its performance. Stronger Nvidia demand, rising AI capex or renewed enthusiasm around Big Tech earnings can therefore have an outsized effect.

US30 fits a different view. Continued gains in banks, healthcare and industrial stocks would allow traders to participate in US equity strength without relying as heavily on technology returning to its previous leadership role.

Both indices can rise together, but the recent divergence shows why they should not be treated as interchangeable US market trades. The underlying sector exposure determines which catalysts have the greatest influence.

Trading US30 with Mitrade

Mitrade’s US30 CFD tracks the Dow Jones Industrial Average, giving eligible Australian clients exposure to 30 large US companies across financials, technology, healthcare, industrials and consumer sectors.

Traders can take a long position if they expect US30 to rise or a short position if they expect the index to weaken. That flexibility can be useful during periods of sector rotation, when strength in banks or healthcare may support US30 while AI-heavy stocks pressure NAS100.

Stop-loss and take-profit orders can help define exit levels, while pending orders allow positions to open when selected prices are reached.

Mitrade is regulated in Australia by ASIC. Index CFDs are leveraged products, so both potential gains and losses can be magnified.

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