over 2 years ago • 1 min
As the US stock market rebounds from September’s swoon to reach a new all-time high, investors are taking comfort from the S&P 500’s renewed breadth of gains.
Market watchers tend to get twitchy when gains in the stock market are driven by just a few stocks – as we saw for much of the post-pandemic rally, when tech giants like Alphabet and Microsoft grew to account for a larger and larger proportion of the S&P 500.
But – thankfully – the chart above shows how October’s gains have been accompanied by growth in Bloomberg’s Cumulative-Advance Decline Index, an indicator of how many of the S&P 500’s members are individually rising or falling.
As we get into the busiest weeks of the third-quarter earnings season – with more than 80% of S&P 500 members so far reporting better-than-expected profits – this weakening reliance on a handful of stocks to fuel gains bodes well for the S&P 500’s future.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.