A broadening stock-market rally just led to this ‘fairly uncommon’ occurrence

It’s “fairly uncommon” for the majority of the index’s sectors to reach such peaks at the same time based on data going back to 1990, the note shows.

The stock market’s stronger breadth in the past several weeks stands in contrast to much of 2023, which saw “narrow leadership” driving the S&P 500’s gains, according to the note. The index has surged around 23% this year, led by the information-technology, communication-services and consumer-discretionary sectors, FactSet data show, at last check.

A group of megacap stocks that span across those three sectors, known as the Magnificent Seven or Big Tech, have propelled the S&P 500’s rise in 2023 with massive gains.

For example, Nvidia Corp.
NVDA,

has skyrocketed around 232% so far this year while Facebook parent Meta Platforms Inc.
META,
-1.22%
has soared around 191% and Tesla Inc.
TSLA,
-1.86%
has surged around 103%, according to FactSet data, at last check. 

Meanwhile, Google parent Alphabet Inc.
GOOGL,
-0.39%
was among the S&P 500’s top-performing stocks in Wednesday afternoon trading, with a gain of around 1.8%, FactSet data show, at last check.  

The S&P 500
SPX
was down 1.2% Wednesday afternoon, after finishing Tuesday just 0.6% below its record close reached in early January 2022.

Seven of the index’s 11 sectors are up so far in 2023, with only consumer staples, energy, utilities and healthcare seeing losses year to date, FactSet data show, at last check.

“Historically, a majority of S&P 500 sectors hitting new 52-week highs on the same day has been followed by weaker-than-average returns in the near term but returns in line with the historical norms over the longer term,” said Bespoke.