Line chart showing the percent of S&P 500 Index members that have outperformed over the previous 12 months from January 1990 to March 2024. Recent readings have dropped to lowest levels shown since 1990. Even surpassing the 1999 and 2000 lows. This indicates that breadth of outperformers has been historically low.
Sources: Bloomberg and Wells Fargo Investment Institute. Monthly data from January 1, 1990, to March 31, 2024. For illustrative purposes only. The S&P 500 Index is a market capitalization-weighted index composed of 500 stocks generally considered representative of the U.S. stock market. The S&P 500® Equal Weight Index (EWI) is the equal-weight version of the widely-used S&P 500. The index includes the same constituents as the capitalization weighted S&P 500, but each company in the S&P 500 EWI is allocated a fixed weight - or 0.2% of the index total at each quarterly rebalance. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. There is no certainty that U.S. markets will continue to show resilience despite crisis events. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. There is no guarantee equity markets will perform similarly during other periods of uncertainty. All investing involves risk including the possible loss of principal.
Key Takeaways
- The percentage of member stocks outperforming the S&P 500 Index over the past year reached historic extremes similar to levels in 1999 and 2000.
- A rally on firm footing should have a larger portion of stocks participating. Fortunately, there has been evidence of that rotation in 2024 as the equal weight S&P 500 Index has hit all time highs.