The S&P 500 Is Nearing a Record Close But Market Breadth Is Bad
The S&P 500 was hovering around its highest close on record on Tuesday, but the index’s gains were driven by a small group of larger stocks.
With the market benchmark up 0.2%, only 170 stocks in the index were rising. The Invesco S&P 500 Equal Weight ETF, or RSP, was down 0.4%. RSP is a proxy for market breadth because it counts every stock in the S&P 500 the same, no matter the company’s size. When RSP lags the regular S&P 500, breadth is weak.
On days when breadth is weak but the index is up, it’s often the Magnificent Seven’s doing. Today was no different: the Roundhill Magnificent Seven ETF, which offers exposure to the seven influential megacap tech stocks, was up 1.1%. Among the group, the biggest laggard was Tesla with a gain of 0.3%. Amazon.com, Microsoft, and Meta Platforms were all up more than 1%. Apple, Nvidia and Alphabet were all up about 0.8%.