Chart is for illustrative purposes only. Past performance is not necessarily an indication of future results.
With technology companies on track to deliver a roughly 50% earnings growth rate in 2026, it is not surprising that the sector has remained a major driver of market performance. However, market gains are not solely reliant on technology and AI-linked names. Excluding these, the S&P 500 is still posting solid gains of 8% year to date, which is a healthy sign and indicative of broader market strength.
A key measure of market breadth is the comparison between the market-cap weighted S&P 500 to the equal-weighted S&P 500. It may surprise some investors to learn that the equal-weighted S&P 500 index is modestly outperforming the S&P 500 so far this year, with a gain of 14% versus 13.2% through early August. This suggests sectors beyond technology and AI capex are contributing to moving the market higher.
Another way to evaluate whether the market is broadening is to look at how many stocks are trading above their recent trend. Currently, about 72% of S&P 500 companies are trading above their 200-day moving average. That is the highest level since December 2024.
Collectively, these measures suggest that breadth is improving – a constructive sign for the forward outlook.
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S&P 500 Equal Weight Index: An index that includes the same 500 companies as the S&P 500 Index but assigns each company an equal weight rather than weighting companies by market capitalization. The S&P 500 Index: The S&P 500 Index is a stock‐market index that tracks the performance of 500 of the largest publicly traded U.S. companies, weighted by their market capitalization, and is widely used as a benchmark for the overall U.S. equity market. Investors cannot invest directly into an index. International (Intl.) Developed Markets: Equity markets in developed countries outside the United States, such as Japan, the United Kingdom, France, and Germany. Magnificent 7 (Mag-7): A group of seven large U.S. technology-oriented companies: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla. S&P 500 ex-AI Capex Beneficiaries: The S&P 500 Index excluding companies that are viewed as significant beneficiaries of artificial intelligence-related capital spending. This measure is used for illustrative purposes and may vary depending on the companies included or excluded. S&P 500 ex-Technology: The S&P 500 Index excluding companies classified within the Information Technology sector.
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