Tech Titans Drive US Stocks: Only 17% of S&P 500 Outperform Index

Over the past 30 days, the $SPDR S&P 500 ETF Trust(SPY)$ has soared more than 3.5%, which is pretty dazzling considering signs of a slowing economy.

Data Analysis

Yet underlying investors' optimism is a worrying fact: only 17% of $S&P 500(.SPX)$ stocks have beaten the index over the past month. That’s a historic low!

Let’s crunch the numbers: out of the S&P 500 stocks, a mere 85 have outperformed the index over the past 30 days. That’s the lowest it's been in at least a decade.

By comparison, over the past ten years, the average has been around 49%, hitting over 50% in the latter half of 2022, late 2023, and early 2024.

Bottom line?

The US stock market’s surge is being driven by just a handful of heavy hitters, especially in the tech world.

For individual stocks, top performers include big tech names like $Tesla Motors(TSLA)$ $Adobe(ADBE)$ $Apple(AAPL)$ $Amazon.com(AMZN)$. On the flip side, laggards include $Nike(NKE)$ $Danaher(DHR)$ $CVS Health(CVS)$.

Market Impact

What does this mean for the market? It reflects an undeniable reality: a select few tech stocks wield unprecedented influence over the market, leaving other sectors in the dust.

This high concentration is both a blessing and a concern: while S&P 500 investors continue to benefit from the tech surge, they also face increased risks if the tech sector’s heat starts to cool. According to Goldman Sachs Research, the S&P 500 tends to see gains in the year following peak concentration.

There’s also concern that compared to more diversified options like the $Invesco S&P 500 Equal Weight ETF(RSP)$, the S&P 500 might be showing signs of overvaluation.

In a nutshell, the current rise of the S&P 500 seems heavily reliant on the strong performances of a few tech titans, while many other stocks are lagging behind. In this scenario, the future direction of the market remains highly uncertain.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • YueShan
    ·07-11 00:43
    Good⭐️⭐️⭐️
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