The top 10 S&P 500 stocks, ranked by market capitalization, have driven significant market performance in recent years. However, a closer examination of past periods with similarly concentrated returns may offer valuable insights for investors.
Over the past two years, the largest U.S. stocks have largely dictated market returns. This trend was especially prominent from early 2023, fueled by excitement over artificial intelligence and the strong performance of the technology and consumer discretionary sectors.
Between January 2023 and June 2024, the top 10 stocks in the S&P 500 delivered a remarkable cumulative return of 104.6%—more than twice the return of the broader index (see Display).
Since July, however, the landscape has begun to shift.
The S&P 500 rose 5.9%, surpassing the returns of the largest stocks, which saw performance diverge sharply during the third quarter.
While it remains uncertain whether this pattern will continue, reflecting on similar historical periods can help investors better navigate changing market dynamics.
Past performance does not guarantee future results.
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Sources:
Bloomberg, S&P and AllianceBernstein (AB)
https://www.advisorpedia.com/strategists/what-happens-after-the-top-10-stocks-outperform/?utm_campaign=G-KM0EGFP0NS&utm_content=294c95132cee01ec8d2c96e296057bf6&utm_medium=email&utm_source=Robly.com
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