S&P 500 and Nasdaq 100 futures are slightly in the red ahead of the open on Wednesday.
You can make the claim that Tuesday was the most surface-level boring day in the S&P 500’s history, or at least since before Pokemon Red was released in the US.
As Carson Group’s Ryan Detrick observed, the S&P 500’s daily change was 0.00% (a drop of 0.00077% if we’re being overly precise), while the advance-decline line was barely tilted to the downside.
It marked the first day since at least February 1997 that the S&P 500’s change was 0 out to three decimal places and the advance-decline line was no greater (/less) than positive (/negative) 5.
While Robinhood traders net purchased single stocks in aggregate on Tuesday, they were net sellers of four of the five most active securities:
Monday’s massive pop in the S&P 500, meanwhile, continued the trend of big up days in 2026 not being sessions in which retail gorged on single stocks.
As a subsidiary of Robinhood, Sherwood Media is restricted from writing about any company in which Robinhood is or was a selling group member of the IPO during the regulatory "quiet period" for that company.
From p(doom) to p(boom)
In a week, it seems like price action has caused the sentiment pendulum to swing from “contemplating the appropriate p(doom) for humanity” to “how (not whether!) to best be bullish stocks.”
The question: whether to ride the renewed hot hands, or believe that the stove may have gotten too hot to touch, at least in the short term.
With the Nasdaq 100 posting a fresh closing high on Tuesday (and the S&P 500 failing to do so), it’s clear that the foundation for the market’s recent strength was built on megacap tech.
The tech-heavy bourse has bested the S&P 500 by 3.8% over the past week, its strongest five-day relative performance since March 2023, when the collapse of Silicon Valley Bank left cyclicals (especially financials) distinctly out of favor.
The Nasdaq 100’s surge versus the S&P 500 exceeds its reaction to Nvidia’s earnings report in late May 2023, an event I’ve anointed as the unofficial kickoff party for the AI boom in equities.
VanEck Semiconductor ETF are decisively above their 50 day moving average and have seemingly broken out from their prior downtrend, while the Roundhill Magnificent Seven ETF set new closing and intraday peaks this week.
The excitement over Meta’s Muse agent has included not just the company itself, but also hardware suppliers that benefit from the AI boom as well as firms partnering with Meta to incorporate Muse-enabled activity.
Of course, in this market, every winner needs a loser, so there’s been a backfilled narrative about how Muse is particularly negative for companies that rely on “consumer inertia.” Many of these stocks, like Netflix, Intuit, or Expedia, rolled over before Muse was in the public consciousness.
This slightly new flavor of dispersion has helped index volatility continue to stay suppressed.
A fading outperformance of value versus growth is a corollary of these titanic tech advances.
The highest quintile of US value stocks were besting their growth counterparts by nearly 13% at their high water mark in Q3. That performance premium stood at about 9% on September 15, but has since shrunk to just 3.5%.
The US stock rally is riding on the back of some powerful engines, but few of them.
Only a little over half of the S&P 500’s constituents are above their 200 day moving averages, down from roughly 75% a month ago.
The index hasn’t been less than 0.5% away from a record close with fewer of its members above their 200 day moving averages since March 27, 2000 — the day after what turned out to be its dot-com bubble era peak!
(Before you get uber-beared-up, however, it’s worth noting that this condition was also present in December 1998. The S&P 500 went on to gain another ~30% before that dot-com era peak.)
Accordingly, the McClellan Summation Index — a running tally of whether the trend in breadth for US stocks is improving or deteriorating — is around levels consistent with some recent intermediate market lows like the March bottom amid the Iran war and the April 2025 tariff walk-back trough.
The extreme divergence between sectors as well as factors and lack of enthusiastic participation in this recent leg of the rally comes amid continued resilience in the US economy. That’s prompting some to look for a snapback in the “many” relative to the “few,” particularly in cyclicals that are more levered to the US consumer than the AI boom.
Not all breadth improvements are necessarily improvements in the relative performance of the average stock compared to the market heavyweights, however.
This year provides a clear example, as semiconductors and megacap tech went on a tear in April, meaningfully outperforming the S&P 500 Equal Weight Index even as the McClellan Summation Index inflected higher.
52 Weak
Perhaps the only thing more stunning than the fairly meager breadth in the near-record-high S&P 500 is the lack of leadership superlatives on offer.
The only years in which the S&P 500 has ended a session less than 0.5% below a record close and had 50% more 52-week lows than 52-week highs have been 2026 and 1999.
In 1999, that only happened twice. It’s happened twice in the past two days.
Let’s zoom in on semiconductors & semiconductor equipment. It’s the most important industry group in the S&P 500, and probably a pocket of the market that might see some momentum-chasing given the recent rally.
Only one stock in this cohort hit a 52-week high yesterday. Most haven’t this quarter!
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Seen on Socials
Via Michael Batnick on X:
What to watch
Wednesday:
General Mills earnings due out premarket.
Thursday:
NY Fed President John Williams due to speak at 4:10 a.m. ET.
BlackBerry and Darden Restaurantsearnings due out premarket.
Richmond Fed President Tom Barkin due to deliver remarks at 8 a.m. ET.
Cleveland Fed President Beth Hammack scheduled to speak at 8:50 a.m.
Philadelphia Fed President Anna Paulson slated to speak at 10:10 a.m. ET.
Costco earnings due out postmarket.
Friday:
NY Fed President John Williams due to speak on a panel at 5:15 a.m. ET.
Cleveland Fed President Beth Hammack slated to participate in a panel discussion at 2 p.m. ET.
