Sevens Report Warns of Rising Risks as S&P 500 Breadth Weakens
Tom Essaye cautions that half of S&P 500 stocks are down YTD despite record-level index.
Why risks of a stock-market drop are rising amid extreme concentration in the S&P 500, Sevens Report warns
Nearly half of S&P 500 stocks are posting year-to-date losses even as the index trades near record highs, according to Sevens Report Research. Founder Tom Essaye warned this divergence signals growing market fragility. “That is not so healthy,” he said, noting the risk of another sharp “air pocket” drop or a broader April-style pullback is rising daily. The top 10 S&P 500 companies now make up 40.5% of the index—surpassing the concentration seen during the 2000 tech bubble. Essaye also flagged weakening market breadth, with the NYSE Advance-Decline Line hitting a 12-week low and only 53% of S&P 500 stocks trading above their 200-day moving averages, the lowest since June.
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