The S&P 500 Index (^GSPC -0.53%) closed down 15.7 points Wednesday, or almost 0.5%, ending a three-day streak of gains that started last Friday. Today's culprit was the usual recent suspect, with tech stocks falling sharply.

The Technology Select SPDR ETF (XLK -0.26%), which tracks the tech stocks in the S&P 500, fell 1.4% today. This erased a day of huge gains for oil stocks, with the Energy Select Sector SPDR ETF (XLE -1.21%) up 4.2% on a big oil-price surge. Financials and industrial stocks also gained today, albeit more modestly. 

Today's biggest winners included General Electric (GE -1.60%), with shares up 10.7%, followed by independent oil producers Occidental Petroleum (OXY -0.96%) and Diamondback Energy (FANG -1.31%), both up around 8%.

But those gains weren't enough to offset the losses at the top of the index, with Apple (AAPL 1.03%) and Facebook (META -0.15%) falling 3% today; the combined $2.7 trillion market cap of these two is more than 40 times larger than today's three biggest gainers combined. 

As big tech moves, so moves the market. 

Stock chart on a computer screen.

Image source: Getty Images.

GE CEO: Worst is behind us, momentum building

Shares of GE have been battered this year, down nearly half from the 2020 high, as the industrial conglomerate has struggled with the impact of the coronavirus pandemic on many of its end markets, not to mention the ongoing efforts to turn the struggling company around after years of missteps. 

Today, investors seem to have reacted positively to CEO Larry Culp's comments at an investor event. Reports say that Culp pointed out that the second quarter is likely to be the worst, and in the second half of the year, operating cash would likely turn positive after burning $3 billion in free cash in the first six months. 

Investors are taking Culp at his word, but GE investors have heard "We are getting there" from management before. Will things (finally) be different this time?

Oil stocks gush higher on inventory news

Two important weekly U.S. oil market reports came out Tuesday and today, and those reports, which indicated a big drawdown in U.S. commercial crude oil inventories, gave investors some much-needed positive news about the state of the oil patch. 

According to the U.S. Energy Information Administration's weekly report, U.S. commercial crude storage fell by 4.4 million barrels, helping to ease the glut that continues to weigh on a weak-demand, still-oversupplied market. As a result, crude prices moved sharply higher, with the key West Texas Intermediate benchmark moving back above $40 per barrel. 

The biggest winners, as noted above, were oil producers Oxy and Diamondback, along with EOG Resources and Devon Energy, with their shares up almost 6% on the report. Global oil behemoth ExxonMobil also surged 4.3% on the news, a big gain for a $153-billion company. 

Here's the catch: Global oil demand is still down by double-digit levels, and the expectations keep worsening for the rest of 2020. As long as demand remains down, U.S. oil producers are going to face a huge threat from Saudi Arabia and other petro-states that depend on oil revenue to fund their governments, and have much lower production costs. 

Tech tumbles again, continuing to drive the index lower

After a streak of gains over the past week, the tech sector reversed course today, falling sharply enough to more than offset the gains of the much smaller energy and industrial sectors. Tech stocks have lost almost 10% of their value since the S&P 500 peaked earlier this month, while the index is down 5.2% as a whole:

XLK Chart

XLK data by YCharts.

The sheer size of the tech industry has played a big role in the market's decline from the high. To be clear: Tech stocks aren't the only reason the S&P 500 has fallen. Since Sept. 2, only the real estate and materials sectors have not fallen. But the tech and telecom sectors are the only two that have fallen more than the S&P 500 as a whole: 

XLE Chart

XLE data by YCharts.

Bigger-picture thinking

Before investors decide it's time to move away from tech stocks en masse, some context is in order. The technology sector is indeed having both a tough week, and a great year. It has driven a significant amount of the S&P 500's recovery, and been the best sector to own this year. 

But that's not unique to 2020. Over the past one, three, and five years, tech stocks have outperformed the S&P 500, and that was the case before the coronavirus pandemic proved a catalyst for technology companies, while holding back other industries: 

XLK Chart

XLK data by YCharts.

That's not to say that many tech stocks haven't gotten ahead of themselves, or that a little breather isn't in order for the sector. But it's an important reminder that it's not just a tech bubble at work here. Big tech has delivered enormous returns in recent years because it's delivering enormous profits. That fact is likely to remain true in the years to come, even if we do experience an extended sell-off in the weeks or even months ahead.