Just 17% Of S&P 500 Stocks Outperform The Index: What Does That Mean For The Market?

The SPDR S&P 500 ETF Trust SPY is up over 3.5% in the last 30 days, an impressive feat amid signs of slowing in the U.S. economy. Despite investor optimism, only 17% of S&P 500 components have outperformed the index in the past month, a historic low.

The Data: A post on X relayed data from The Compound News.

According to the data, just 17% of S&P 500 members — approximately 85 companies — outperformed the overall index in the past 30 days. The 10-year average for overperformance is 49%, far above today’s figure.

This is the lowest number for 30-day outperformance in at least a decade. The figure reached above 50% for extended periods in mid-to-late 2022, late 2023 and early 2024.

Tesla Inc, Adobe Inc., Apple Inc and Amazon.com Inc are among the few companies to outperform the index, according to Benzinga Pro. Nike Inc, Danaher Corp and CVS Health Corp are a few of the biggest underperformers.

Why it Matters: The data reflects the fact that just a few technology-focused stocks have a historically outsized impact on the market. Big Tech has outperformed companies in other industries.

High concentration is a double-edged sword: while investors with S&P 500 exposure stand to benefit even more from tech’s continued rally, they also face increased risk if the market sours on the tech play. According to Goldman Sachs Research, the S&P 500 has historically rallied in the year following periods of peak concentration.

There are some concerns that the standard S&P 500 has become overvalued compared to its more diversified, Invesco S&P 500 Equal Weight ETF RSP counterpart.

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