A Narrow Market Beneath the S&P 500The S&P 500 is near all-time highs, but almost half of its stocks are moving differently from the index. Goldman says the divergence resembles the Tech Bubble.
Market concentration is driving the gap. The 10 largest stocks account for around 40% of the S&P 500, and many are benefiting from the AI boom. Their size can lift the index even as broader participation weakens.
The rest of the market is facing higher bond yields, $100+ oil, a stronger dollar, and higher borrowing costs. Record levels in the S&P 500 do not mean most stocks are performing well.
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