TLDR
- Five megacap tech stocks have driven 93% of the S&P 500’s gains since late July.
- Microsoft leads the group, followed by Meta, Apple, Alphabet, and Nvidia.
- Only one S&P 500 sector, information technology, has risen over the past month.
- Rising Treasury yields, high oil prices, and a hawkish Fed are pressuring the broader market.
- Morgan Stanley’s Mike Wilson said a market correction could help stocks finish the year stronger.
The S&P 500 sits fewer than 100 points from its mid-August record high. The index rose 1.2% last week, and the Nasdaq Composite gained 2%.
The S&P 500 is 0.7% below a record high, yet 430 of those stocks are 21.7% below their highs. That means on average 86% of the stocks are in a bear market. Breadth has only been this bad twice, in January 1973 and in 1999/2000. On both occasions, the S&P then crashed nearly 50%
— Peter Schiff (@PeterSchiff) September 26, 2026
On the surface, stocks look healthy. Underneath, strategists say the picture is different.
Five tech companies have produced 93% of the S&P 500’s gains since late July. That is an unusually large share for such a small group of stocks.
Microsoft leads the pack, adding 181 of the index’s 330 point advance since the summer low. Meta, Apple, Alphabet, and Nvidia round out the group.
Market Breadth Is Shrinking
Only one S&P 500 sector, information technology, has risen over the past month. Just four of the eleven sectors have gained over the past two months.
The share of stocks trading above their 200 day moving average has dropped from 73% to 51%. That decline happened even as the index itself hit new highs.
Analysts describe this pattern as narrowing breadth. It means fewer stocks are participating in the rally, even as the overall index climbs.
Historically, healthy market advances involve a wide range of stocks moving higher together. A rally built on just a handful of names is seen as more fragile.
Pressures Building Outside Tech
Treasury yields have been climbing fast. The 10-year yield reached its highest level since 2007, while the 30-year yield hit a 22 year high.
Oil prices also spiked. Crude topped $108 a barrel on Monday after Iran rejected a plan involving the Strait of Hormuz, before falling back toward $93 later in the day.
The Federal Reserve is expected to raise interest rates again in October, based on futures market pricing. That would add another layer of pressure on stocks outside the tech sector.
Midterm elections on November 3 add another source of uncertainty. A shift in control of Congress could change the economic outlook for the next two years.
Morgan Stanley’s Mike Wilson said he would welcome a market correction. He argued that a drop at the index level often marks the end of a longer correction happening beneath the surface.
Wilson said that if bond yields do not ease soon, volatility could push the S&P 500 down by 5% to 10%. He pointed to the two-year Treasury yield trading above the Fed’s own long-term forecasts.
He said sectors like automotives, semiconductors, and industrials have weakened recently. This shift often happens as an economic cycle matures and rates stay elevated.
Wilson said he continues to favor large, high-quality companies. He specifically named asset-like, services-oriented, and fee-based businesses as his preferred picks going forward.
As of Monday, oil prices had eased from their highs near $108 a barrel to just under $93, while Treasury yields remained near multi-year peaks.
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