S&P 500: The best and worst performers so far in 2023

Yahoo Finance Live anchors Rachelle Akuffo and Brad Smith break down the best and worst performers of the S&P 500 in the first quarter of 2023.

Video Transcript

RACHELLE AKUFO: Well, an action-packed first quarter coming to a close as stocks eye a second straight quarterly gain despite banking stress and elevated interest rates. Let's take a closer look at some of the best and worst performers, starting with the S&P 500. So as we're looking here, we've got Nvidia, Meta, Tesla, Warner Brothers, Discovery. I thought Nvidia was an interesting one.

A lot of people looking at it as a real strong AI player especially. We saw from Stacey Rasgon at Bernstein, he reiterated his outperform rating, raised his price target forecast to $300 from $265. And this really is based on this need, this expected need, for these Nvidia chips to train the AI models that are going to be running this generative AI that's clearly in demand at the moment. And we saw that Nvidia CEO Jensen Huang announced a wide-ranging set of partnerships for the products as well. So this really does seem like a long term play that Nvidia is really capitalizing on.

BRAD SMITH: Yeah, and a few things within the best performers. I mean, you also look at the environment that they're waiting through right now, whether that's on still the fundamentals, not really having clear sight going ahead. You don't know when the digital advertising market is going to resume the type of spending that we had seen in 2021 or even 2020 as everybody was spending more time on their devices and everybody wanted to get some of their attention and get some of the dollars that consumers were still willing to spend to whatever extent. So there's the digital advertising market. And even with that, there is still a buoy that companies like Facebook and Google could benefit from because they're typically seen as the two behemoths, the duopoly, that's been able to drive that narrative for so long.

However, that is getting a little bit more different because of the type of devices that end users have in their hands on a daily basis. All that considered, though, on how we go forward from here-- semiconductors, even the rebound there, you could really kind of sum it up in some of the worst performers of last year being some of the early year best performers here in 2023. And if you look at some of the worst performers as of right now, it's the names that should have beware-- or should have-- what is the adage? Beware the ides of March, right?

Banking sector probably could have benefited from that because of the turmoil that we've seen take place there. Some of the biggest decliners there, you're seeing regional banks. First Republic, of course, the most outsized there. And that has been down by about 89%, but much of that move significantly coming, of course, during March given the fallout and given some of the different stressors that have impacted and the missteps that management has made within some of the regional banks there that have resulted in the injections of cash and capital that they've needed to take on just to stay or try to stay afloat right now, too.

RACHELLE AKUFO: That's true. I mean, and speaking of some of these worst performers in the S&P, you also have in their Dish Network, one of the few pure streaming plays still left. And they're really trying to find its place in this market. You have Amazon, Apple, all the other sort of getting into this space. Dish Network still searching for some direction there. And even as we look at some of the best performers in the NASDAQ 100, Nvidia again making another appearance, but also Meta, Tesla, you have CGen as well. A lot of people wondering what's going to be happening with Tesla. A lot of headlines obviously surrounding Elon Musk. But we saw what their production targets look like. And apparently investors do believe that Tesla is actually going to make those.

BRAD SMITH: And so what does this all come back to as well? It still comes back to the Fed-- and I know we're going to talk about this more in a second-- but it comes back to the policy pathway and the tenor that this Fed has signaled. If they have this signal and given language to the markets that perhaps the worst of the rate hiking is behind us, and now we are getting to more of a stable period where the markets can anticipate what the Fed may do without having to fight the Fed, then you're going to see a continued rally in some of the very names that have really led the way thus far in 2023. Tech stocks, most importantly, because they were some of the most battered as the Fed was initiating the end of their easy money policies as well.

RACHELLE AKUFO: I mean, you have to wonder when it comes to some of these tightening conditions for small businesses, where we're going to start seeing people pulling back. It might show up. I mean, maybe you won't-- again, going for that more expensive car, if you have to sort of tighten the purse strings. And Teslas aren't cheap. That's for sure.

BRAD SMITH: I have to get a car first, Rachelle, thank you.

RACHELLE AKUFO: That's all right.

BRAD SMITH: That MTA subway pass works real well.