MW The S&P 500 climbs for a 9th straight day - but the 'breadth paradox' is sending a rare warning
By Frances Yue
Fewer stocks are participating in the record rally
The S&P 500 recorded its ninth straight daily gain on Tuesday.
The S&P 500's latest string of records has come with a catch: Fewer stocks are participating in the rally.
That could leave the large-cap benchmark index vulnerable if momentum in its biggest leaders, many of them tied to artificial intelligence, starts to reverse - a shift that could begin in June, according to Jonathan Krinsky, chief market technician at BTIG.
The S&P 500 SPX on Tuesday recorded its ninth straight daily gain and is on pace for its 10th straight weekly advance, according to Dow Jones Market Data. However, beneath the surface, the index has posted negative breadth for six straight trading sessions - meaning more S&P 500 stocks fell than rose, even as the index itself kept moving higher.
The top panel in the chart below shows the index rising for several straight sessions, while the bottom panel shows the daily number of advancing stocks minus declining stocks staying negative over the same stretch.
That is historically unusual. Based on data going back to 1996, the S&P 500 has never before risen for six straight days while decliners outnumbered advancers each day, Krinsky wrote in a Tuesday note. In fact, he said, the index had never before done so for more than three straight sessions.
That could be concerning because it suggests the rally is becoming increasingly reliant on a small group of heavily weighted stocks. The divergence between the S&P 500's gains and the weakness among many of its members highlights what Krinsky calls the "breadth paradox," in which the market's largest stocks can keep pushing the index higher even as weakness spreads across much of the rest of the market.
As long as those leaders continue to climb, the S&P 500 can keep rising even as many of its individual components struggle. But if momentum in those winners starts to unwind, the same concentration could work in reverse, pulling the index lower even if participation improves elsewhere in the market, according to Krinsky.
"When we finally get a sustained momentum unwind, you can easily get a situation where breadth is strong, yet major indices fall anyway. We continue to think June is a likely spot for this reversion to begin," Krinsky wrote.
The concentration in the market is striking. Information technology XX:SP500.45 now makes up nearly 40% of the S&P 500, a record high, according to Krinsky. The top 10 stocks in the index also account for roughly 40% of its market value.
What's more, over the past five sessions, only two S&P 500 sectors were higher, according to Dow Jones Market Data; technology rose 5.9%, while energy XX:SP500.10 gained 0.3%. By contrast, three sectors were down 3% or more, including real estate XX:SP500.60, utilities XX:SP500.55 and communication services XX:SP500.50.
-Frances Yue
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(END) Dow Jones Newswires
June 02, 2026 20:31 ET (00:31 GMT)
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