On the surface, Friday's relatively flat finish by the S&P 500 Index (SNPINDEX:^GSPC) might make it seem like it was a calm day on Wall Street. The reality: It was another painfully volatile day in a volatile week for tech stocks, which fell sharply enough to wipe out gains in almost every other sector. 

Amazon (NASDAQ:AMZN) shares fell almost 2%, leading big tech lower as almost every tech stock with a market cap above $200 billion closed lower to end the week. While tech was falling, every other sector except real estate gained in value, with industrials and materials sectors both up more than 1% to close out the week. Fertilizer company Mosaic, paper and packaging giant Avery Dennison, mining giant Freeport-McMoRan, and refiner Marathon Petroleum led their sectors higher, with all up 3% or more. 

Person with perplexed expression in front of scales drawn on a chalkboard.

Image source: Getty Images.

Investors continue moving out of big tech stocks

Today's tech stock sell-off continued a trend that's seen the S&P 500 tech sector lose more than 11% of its value since the market peak last week. That's easily the worst sector performance in the S&P 500 over that period, outpacing the declines of the telecom and energy sector that have also experienced big investor outflows. Here's how these sectors (as measured by the Energy Select Sector SPDR ETF, Technology Select Sector SPDR ETF, and Telecom Select Sector SPDR ETF) and the full index (as shown by the SPDR S&P 500 ETF Trust) have performed since Sept. 2, when the S&P reached its all-time high. 

XLE Chart

XLE data by YCharts

Every sector has sold off since the high, but the tech sector has driven the lion's share of the losses. 

Outsize tech sector sell-off wiped out broad gains almost everywhere else

Here's how all the sectors closed on Friday: 

XLP Chart

XLP data by YCharts

The biggest, most valuable companies in the U.S. are largely technology companies, and as they move, so moves the broader market. That's how you can have one sector notably underperform a market in which almost all other sectors move higher and still finish at barely breakeven. 

Here's more context: The five biggest tech companies in the S&P 500, Apple (NASDAQ:AAPL), Amazon (technically classified as a consumer goods retailer, but it's just as much a tech company), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), and Facebook (NASDAQ:FB) had a combined market cap of $6.9 trillion at market close on Friday. The five biggest nontech companies, Berkshire Hathaway, Walmart, Johnson & Johnson, Procter & Gamble, and JPMorgan Chase, have a combined market cap of $1.9 trillion. 

Tech companies have a massive influence on U.S. stock markets, including the highly diversified S&P 500 Index. The sector has driven an outsize portion of investors' returns this year. Many of those investors have spent the past two weeks cashing out some of those gains in an uncertain economic environment as the coronavirus pandemic continues to weigh on the global economy.  

Get used to volatility

This has become a constant refrain, but it's the reality that stock investors must come to terms with. Record volatility has been the hallmark of 2020, and that volatility is likely to remain with so many uncertainties -- economic, political, and health-related -- continue to cast long shadows over investors. 

Tech has been a big loser over the past couple of weeks, but it's also been the best-performing sector by far in this and prior years. As big tech becomes a bigger part of how we live and work in the years ahead, the longer trend of outperformance is likely to return. Stock investors would do well to remember that before joining others in the big tech exodus.