MARKET CONCENTRATION
How narrow is today’s rally in the S&P 500?
The “Magnificent 7” trade of 2023–2024 taught investors an uncomfortable lesson: a handful of megacaps can drag an entire index up (or down) while the average stock does something completely different. This page measures that split two ways — first with the top 10 stocks vs the equal-weighted broad market, then with a purer cap-weighted vs equal-weighted full-index comparison for both the S&P 500 and Nasdaq 100.
Who's winning right now?
Return gap between the equal-weighted top 10 and the equal-weighted broad market over the selected window. The needle tells the story at a glance.
megacaps winning Broad →
broad market winning
Top 10 vs Equal Weight
Equal-weighted average return of today's top 10 constituents, compared to the equal-weighted broad-market ETF. A large positive gap = megacap dominance. A large negative gap = broadening rally.
The 10 tickers being tracked
Today's top constituents by market cap. These change slowly over time — we use the current list for the entire historical window.
Cap-weight vs Equal-weight — full-index concentration
A cleaner concentration measure that doesn’t depend on picking a top-10 list. Each index has a cap-weighted version (SPY, QQQ — the ETFs everyone quotes) and an equal-weighted version (RSP, QQEW — each of the 500 or 100 stocks weighted equally). When cap-weighted beats equal-weighted, the mega-caps are dragging the whole index up. When equal-weighted wins, the average stock is participating.
S&P 500 — SPY vs RSP
SPY beating RSP Broad →
RSP beating SPY
Nasdaq 100 — QQQ vs QQEW
QQQ beating QQEW Broad →
QQEW beating QQQ
How to read this
- Gap is the story. If Top 10 is beating the broad market (positive gap), the index rally is being led by megacaps — a "narrow" market. If the broad market is beating the top 10 (negative gap), participation is broadening — historically a healthier setup.
- Longer windows are less accurate. We use today's top 10 for the entire lookback. Nvidia wasn't in the top 10 before 2023, and Meta hit the top 10 later than most. Over 1D, 1W, 1M, 1Q this is fine; over 6M and 1Y it's approximately right; before that it drifts.
- Cross-reference with the BATS. When the top 10 vs broad gap is stretched (either direction), and the BATS Breadth component is also flagging extremes, the concentration story is especially strong.
- Note the sector concentration. The S&P 500's top 10 is heavily tech. When tech leads the index, this table shows a big positive gap; when value/dividend stocks lead, the gap flips negative.
Reminder: None of this is investment advice. Historical patterns are not guarantees. Always do your own research or talk to a financial professional.