The S&P 500 hit a new all-time high on Tuesday, but this rally is extremely narrow with most stocks lagging significantly. About three quarters of the 500 stocks in the index were in the red between Aug. 13 and Monday’s close, with only a handful of megacap names like Meta (+25%), AMD (+31%), Nvidia (+6%) and Microsoft (+6%) driving the gains. The S&P 500 Equal Weight index, which treats all stocks equally, fell nearly 5% over the same period, highlighting the lack of broad market participation. The S&P Short Range Oscillator remained in oversold territory for 18 consecutive sessions while the S&P 500 rose nearly 2.5%, showing a major divergence between the flagship index and the broader market. The Federal Reserve is expected to raise interest rates once more before year-end, an environment that favors megacap companies that do not need low borrowing costs to grow.
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