The S&P 500 and most of its stocks are heading in opposite directions at a record pace. What investors should know.

By Christine Idzelis

Here are the S&P 500's top gainers in market value this year and this quarter

"It's a little hard to hide" from Big Tech stocks, says Scott Helfstein, head of investment strategy at Global X ETFs

Stock-market performance and breadth are diverging this year at a pace that has never been seen before.

A small number of stocks have powered much of the broader market's comeback rally in the second quarter, as data below shows. This has led to a dynamic where the S&P 500 frequently rises, even on days where a majority of stocks in the index fall.

Jason Goepfert, who is responsible for market studies and Capital Context charts as an adviser to NextGen News, pointed out in a chart posted on X that the S&P 500 has tallied the most days where index direction and breadth have diverged at this point in the year according to data going back to 1928. Analysts at Bespoke Investment Group have created a similar chart, and also shared their data with MarketWatch.

"There's a handful of stocks driving the index higher or lower, and then the rest of the stocks in the index are just going their own way," said Goepfert, who previously founded SentimenTrader, a provider of stock-market research.

This tends to happen when "there's a big focus on momentum stocks" in a concentrated index, Goepfert said. The record pace at which the S&P 500's price has diverged from breadth in 2026 makes him "cautious" from a technical perspective, even if it's not a "sell everything" signal, he added.

Goepfert referred to this phenomenon as the "Costanza Market" in the title of the chart he posted on X - a nod to the "Seinfeld" character George Costanza. In one memorable episode, Costanza found success at work and in his love life when he did the opposite of what his instincts told him to do.

To be sure, positive breadth hasn't always been an essential ingredient in this bull market, which has been largely powered by semiconductor stocks and other AI-linked names. But many believe broad participation would still be a healthy sign for the S&P 500.

However, without contributions from these heavily-weighted names, the index would likely struggle.

"It's a little hard to hide from them in general," Scott Helfstein, head of investment strategy at Global X ETFs, told MarketWatch of Big Tech stocks. "The market is so sensitive to them."

Biggest gainers

Alphabet (GOOG) (GOOGL), a Big Tech company with a market capitalization approaching $5 trillion, has seen the biggest gain in market cap of any stock in the S&P 500 since the start of 2026, and since the start of the second quarter, when stocks' latest leg higher began.

But the bottom 480 stocks in the S&P 500 have collectively seen a loss in market value this year through May 15, as seen in the chart below.

Alphabet and artificial-intelligence chip maker Nvidia (NVDA) stand out for topping the charts for market-cap gains both this year and this quarter, according to Dow Jones Market Data.

While Micron Technology (MU) is third for 2026, the chart below shows Apple (AAPL) holds that spot for this quarter through May 15.

The Big Tech stocks known as the "Magnificent Seven" all are among the top 20 gainers in market value so far this quarter, including Alphabet, Nvidia, Apple, Amazon.com (AMZN) , Microsoft (MSFT), Tesla (TSLA) and Facebook parent Meta Platforms (META).

But hot semiconductor names outside the "Magnificent Seven" have also ranked among the biggest market-cap gainers.

"The Mag 7 trade has become much more selective over the last 18 months, a definite positive in our view, but these names still have an outsized influence on S&P 500 returns," said Nicholas Colas, co-founder of DataTrek Research, in a note shared with MarketWatch on Monday.

Just this month, the Big Tech stocks have contributed 85% of the S&P 500's advance, after contributing 50% in April, Colas said about the "Magnificent Seven."

The S&P 500 has climbed 8.1% this year through Monday, with Alphabet, Nvidia and Amazon all widely surpassing the index's gains, according to FactSet data. Apple has also posted a bigger year-to-date gain than the S&P 500, while Microsoft, Tesla and Meta are in the red so far in 2026.

The U.S. stock market ended mostly lower Monday , with the S&P 500 and technology-heavy Nasdaq Composite Index COMP down while the Dow Jones Industrial Average DJIA rose modestly. The S&P 500 slipped 0.1%, as four of the "Magnificent Seven" fell, according to FactSet data.

By contrast, the Invesco S&P 500 Equal Weight ETF RSP, an exchange-traded fund that equally weights stocks in the index, rose 0.6% on Monday. The S&P 500 and its equal-weighted counterpart have seen a broad divergence in performance in the second quarter.

"I don't have a problem with people playing tech and being a little bit defensive with the Mag 7," said Helfstein. "They're impressive companies," he said. "The issue is we just all over-own them."

-Christine Idzelis

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(END) Dow Jones Newswires

05-18-26 1725ET