Key Takeaway: Year-to-date gains in the S&P 500 have been fueled by remarkable strength out of the largest stocks. Zooming out to early 2022 shows that it’s the index itself (and its mega-cap drivers) that have just now caught up to the median stock in the S&P 500.
More context: The median stock spent the first five months of this year consolidating the move off its 2022 lows. The mega-caps were the laggards and coming into this year, the S&P 500 was still 20% off its high while the median stock in the index was only in a 13% drawdown. Now the megas have caught up to the median and the move toward new recovery highs has resumed for the index and beneath the surface.