Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
AÇÃO
The S&P 500 is up 13% year-to-date, which may sound perfectly admirable, but the headline figure hides much of what is going on under the surface.
While the index as a whole appears to be doing well, investors would do well to remember that the S&P 500 is weighted by market cap. When the likes of Nvidia, Apple or Microsoft make a move, the index will dutifully plod along the same path, even when the bottom 100 stocks go in a completely different direction.
This fact can make the overall performance of the index somewhat misleading. If a large company goes up 10% and a small company goes down 10%, all else equal, the S&P 500 itself will rise. The same is true of any other index.
This would not normally be a problem, but the S&P 500 is currently extremely ‘top-heavy’ from a historical perspective. The top ten companies now make up around 40% of the entire index; the top five make up over a quarter of it. Such a skew is not normal. In the year 2015, the ten largest companies made up only 17% of the S&P 500, but this figure has essentially gone up in a straight line over the last decade. Even during the height of the dot-com bubble, the top ten only managed to occupy roughly 25% of the S&P 500. Over the last 35 years, concentration at the top averaged just 21%.
A look at year-to-date stock performances in the top ten reveals the following:
Company |
Weight |
YTD share price change |
|---|---|---|
| Nvidia (NVDA) | 8.0% | +25% |
| Apple (AAPL) | 6.9% | +23% |
| Microsoft (MSFT) | 5.5% | +7% |
| Amazon (AMZN) | 3.9% | +9% |
| Alphabet Class A (GOOGL) | 3.1% | +10% |
| Alphabet Class C (GOOG) | 2.9% | +8% |
| Meta Platforms (META) | 2.6% | +10% |
| Broadcom (AVGO) | 2.4% | +3% |
| Tesla (TSLA) | 2.1% | -17% |
| Micron (MU) | 1.7% | +276% |
The extraordinary outcome of the above table is that Nvidia, Apple and Micron alone are responsible for roughly 4.5% of the rise in the S&P 500 so far this year. As stated in the opening paragraph, the index as a whole rose 13% over the same time frame.
While absent from the top ten, Advanced Micro Devices (AMD) is also worth mentioning here. At number 13, the chipmaker only accounts for 1.4% of the S&P 500, but the company has gone up almost 200% since January, meaning its contribution adds a full percent to the index’s gains.
Four companies. Four companies out of five hundred account for nearly half of the 13% rise seen in the S&P 500 in 2026.
These are not the signs of a healthy index. Goldman Sachs recently reported that market breadth has fallen to its lowest level since the early 2000s and the dot-com bubble. Analysts at the Kobeissi Letter claim that only half of all stocks are currently trading above their 200-day moving average, while only 25% are trading above their 50-day moving average.
Zooming out, the picture gets even uglier. 44% of all stocks are trading at least 20% below their 52-week highs, while almost 60% are trading at least 20% below their all-time highs. The dramatic implication is that most of the index is already in bear market territory. At the absolute bottom of the table, nine companies are down over 50% since the start of the year. On an average trading day, more individual stocks are hitting fresh 52-week lows than 52-week highs.
So many of the companies making up the S&P 500 have been forgotten as market participants pivoted towards artificial intelligence, semiconductors and everything in between.
Software-as-a-service (SaaS) and enterprise software got completely decapitated this year, as agentic tools such as Claude revolutionised the game almost overnight. Salesforce (CRM), SAP, ServiceNow (NOW) and Adobe (ADBE) all got hammered, while IT consulting firms were unceremoniously booted out of the door.
The tech sector has essentially split in two, resulting in the software and hardware sides going their respective ways. Money poured out of the former and into the waiting hands of the latter, producing the kind of explosive rises observed in the likes of AMD and Micron.
Outside of tech, many legacy giants have undergone harrowing drops in share price in recent years as shifting consumer habits pulled the rug from underneath their feet. Paramount (PSKY) is down 90% from its record high; Nike (NKE), Lulu Lemon (LULU) and PayPal (PYPL) are all down 80% or more; Estée Lauder (EL) is down 75%; Roblox (RBLX) is down 70%; the list goes on.
Questions of breadth and health aside, the current situation with the S&P 500 perfectly illustrates the benefit of investing in a weighted index as opposed to picking individual stocks. There is no need to guess which stocks are going to do well because the weighted nature of the instrument automatically feeds the winners and starves the losers. It is a passive rebalancing engine.
The long-term chart of the SPX is a mirage. The index hides the hundreds of stocks that have performed abysmally in recent times. The disparity is historically abnormal and investors are beginning to see the writing on the wall.
About the Author
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
Reviewed by RADEX MARKETS
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