S&P 500's Rally Masks Uneven Stock Performance

The S&P 500's recent rally is showing signs of weakness as fewer stocks are contributing to its gains, with technology giants like Alphabet and Microsoft driving the index higher while many other stocks decline. This trend, known as poor market breadth, suggests a fragile foundation for the rally, raising concerns among strategists about stretched valuations and elevated positioning. The equal-weight version of the S&P 500 has been declining, indicating that the rally is not broad-based, and some analysts warn of a potential sell signal if the trend continues.