The S&P 500 is within 0.2% of its record, yet 41% of S&P 500 stocks sit over 30% below highs. It is quite clear, there are just a few names are carrying the whole market.

Some 84% of index members trade at least 10% below all-time highs, and 17% are down more than 50%. However, the index weights companies by market value, so the largest stocks dominate its moves.

Which S&P 500 Stocks Are Missing the Rally?

Real Estate leads, with 97% of its stocks at least 10% below all-time highs, The Kobeissi Letter said.

Materials follow at 96%, Utilities at 94% and Consumer Discretionary at 92%.

In contrast, Energy has held up better at 62%, followed by Healthcare at 70% and Information Technology at 72%.

Meanwhile, real estate stocks hit a record low against the S&P 500 last week.

Longer-dated Treasury yields hit 24-year highs on October 7. Higher yields can weigh on rate-sensitive sectors such as real estate and utilities.

How Long Can a Few Names Hold Up the Index?

The index closed above 7,800 for the first time on October 6, CNBC reported. In addition, Nvidia, Apple and Microsoft make up roughly a fifth of the S&P 500.

Kevin Gordon, Schwab’s head of macro research and strategy, says artificial intelligence (AI) stocks now hold the index up. However, the average member fell 14% peak to trough since early August, he noted.

Goldman Sachs’ ex-AI index excludes stocks the bank classes as AI enablers. It gained 6.7% in the six months to October 6, against 18.3% for the S&P 500.

Gordon said a single mega-cap capex miss, a shortfall in AI spending, paired with pared-back budgets could disrupt earnings.

With 17% of members already down more than 50%, the index may lack a broad base if AI spending falters. Third-quarter reports from the largest AI spenders may show whether that base holds.

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