S&P 500 futures rose above 7,540 for the first time over Memorial Day weekend, and the index is up about 9% year to date. Nvidia has become the dominant driver because it is the largest publicly traded company and the S&P 500 is weighted by market capitalization. Only 57% of the 503 stocks in the S&P are in the green year to date, and 61% of components are underperforming the market. Nvidia’s year-to-date rise of more than 15% moves the index more than smaller companies with much larger percentage gains. Nvidia alone accounts for roughly 20% of the S&P 500’s 9% gain this year.
"The biggest reason the S&P 500 keeps grinding upward is simple: Nvidia ( NASDAQ:NVDA | NVDA Price Prediction) has become too large to ignore. Carrying a market valuation of more than $5.2 trillion, the AI chipmaker is the largest publicly traded company in the world. And because the S&P 500 is weighted by market capitalization, the largest companies exert the biggest pull on the index's direction."
"In other words, a large swath of stocks are actually falling this year by significant percentages even as the index keeps hitting records. Only 57% of the 503 stocks in the S&P are in the green this year, and many just barely so. Just 197 of them are beating the index's average, meaning 61% of the components are underperforming the market. That's not what a healthy broad-based rally usually looks like."
"Let's put Nvidia's influence into perspective. Nvidia stock is up more than 15% year to date. Meanwhile, Sandisk ( NASDAQ:SNDK ) - despite soaring 522% this year - carries a market value of just $298 billion. Nvidia's gains therefore move the index far more than smaller companies posting much larger percentage returns."
"The math is staggering: Nvidia alone accounts for roughly 20% of the S&P 500's entire 9% gain this year. One stock is responsibl"
Read at 24/7 Wall St.
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