Amid the incessant geopolitical tumult coming out of Washington and elsewhere, tech stocks have served as an island to which investors have been able to retreat and earn outsized returns.
In fact, there's an argument to be made that the sector actually has benefited from some of the more prominent headline risks. Tech stands to gain perhaps more than any other sector if President Donald Trump's saber-rattling trade strategy works out, and the administration-backed tax cuts have put more money in shareholders' pockets through a history-making jump in share buybacks that have been skewed toward the sector.
All in all, tech has served a multitude of purposes, from a cyclical play amid economic growth and rising interest rates, and as pure quality amid fears that corporate profits are peaking.
"They're really not driven by a lot of these headline macro variables. They've also stayed out of the Washington limelight in terms of being part of a tweetstorm or what have you," said Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors. "They're going to be more heavily driven by fundamentals, which continue to be supportive."
Investors have liked the results so far.
Tech shares are up 14 percent year to date on the S&P 500, the best of the index's 11 sectors. The Nasdaq, weighted about two-thirds toward technology, has gained nearly 11 percent, easily outperforming other major indexes and reaching a 52-week high during Wednesday's rally. The S&P has risen about 3 percent for the year while the Dow industrials are up just over 1 percent.
In fact, the ProShares S&P 500 Ex-Technology exchange-traded fund, which tracks the index's performance minus the tech sector, is off 0.5 percent for the year.
Earnings rose 26.8 percent in the first quarter, fourth-best of all sectors, and are projected to grow 23.1 percent in the second quarter, third-best, according to FactSet. Technology companies, with a collective market cap of $6.2 trillion, now compose 26.4 percent of the S&P 500, by far the biggest share of the cap-weighted index, according to S&P Capital IQ.
More importantly, the sector has been immune to threats of a trade war and the market's continuing worry that inflation is brewing.
That's in good part because one of the main objectives in Trump's tariff threats has been to get China to stop pilfering intellectual property from American companies. Aside from the occasional Twitter fights the president has picked with Amazon CEO Jeff Bezos, Trump has been a friend to tech companies.