The S&P 500 is closing in on fresh record highs, but the gains rest on a narrowing group of stocks. The equal-weighted version of the index has fallen 4% over the past month even as the headline benchmark climbs, and strategists say the split resembles conditions last seen around 1999-2000.
Only a handful of names are keeping the S&P 500 at records this week, and that narrowness has traders worried the broader market could struggle if those few stocks falter. The index rose more than 1% over the past month through Wednesday's close and is riding a three-day winning streak.
Equal-weighted index tells a different story
The market cap-weighted S&P 500 looks strong on the surface, but the equal-weighted S&P 500 has fallen 4% over the past month, a version of the benchmark that gives every company the same weight. That gap shows up while the headline index sits within 1% of its intraday all-time high from mid-August.
BTIG's Jonathan Krinsky points to the widening gap between winners and losers. According to Krinsky, "we also can't ignore the extreme dispersion" as the market shows an increasing number of stats that rhyme with 2000. SentimenTrader's Jason Goepfert made a similar point this week, noting the index hasn't traded this close to record levels while 52-week lows outnumber 52-week highs since 1999.
Tech and Meta lead the advance
Only two sectors, technology and communication services, are higher over the past month. Intel, Skyworks Solutions and Meta Platforms lead the pack, each up more than 30% over the past month.
Beyond the mega-cap names already driving the index, analysts are still finding new AI-linked trades. Seaport's Jay Goldberg initiated coverage this week on Semtech, ON Semiconductor, SiTime and Marvell Technology, calling them the four horsemen of AI. Goldberg currently recommends three of the four, though he sees all four as tied to the technology industry's demand for AI infrastructure.
Sources: CNBC, MarketWatch (snippet-based)
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