S&P 500 gains mask declines in more than 40% of its stocks

what happened

Reuters reports that the S&P 500 has climbed 14% in 2026 to record highs, while more than 40% of its constituents have fallen. The advance has been concentrated in several chipmakers and other artificial-intelligence-related companies. Sandisk and Micron Technology have more than tripled, whereas the index’s median stock has gained only about 4%, according to Reuters’ analysis of LSEG data.

More than 200 S&P 500 companies are lower for the year, and at least a quarter of the index has declined 11% or more. The analysis uses the current membership and excludes 18 companies that left the index in 2026. Eight of the 11 sector indexes are higher, led by energy with a 42% gain and technology with a 32% increase. Technology has nevertheless generated more than 10 percentage points of the benchmark’s advance because of its size, while energy has contributed less than 1%.

The latest market strength has been driven by rapid earnings growth among AI companies, while profit expansion elsewhere remains limited. The Federal Reserve’s September rate increase and expectations of additional hikes have weighed on industrials, consumer-goods sellers and real estate. Nvidia has supplied almost 2% of the index’s gain, while Apple, Micron and Advanced Micro Devices have each added more than 1%. Tesla has fallen 15%, reducing the benchmark’s advance by about 0.3%. Fewer than half of current constituents were above their 200-day moving averages; a week earlier, the share was 40%, its lowest level since May 2025.

why it matters

The market’s narrow leadership underscores its reliance on a handful of large AI-related companies and leaves the broader rally more exposed to interest rates, bond yields and shifts in technology-sector demand.

instruments