Eric Wallerstein
The Wall Street Journal
July 11, 2023
The S&P 500 has dominated its equal-weighted counterpart since the fall of Silicon Valley Bank. That’s starting to change. The S&P 500 Equal Weight Index which weights each company equally rather than by market cap has gained 6% this year. It was in negative territory as recently as late May.
The benchmark S&P 500 index, meanwhile, is down 0.9% in July, while the equal-weighted index is in the green. The equal-weighted S&P 500 has historically beaten the traditional index. This year’s 15% rally by the S&P 500 was incredibly narrow, however, powered by a dramatic runup in shares of big tech companies. The S&P 500 information technology sector is up 40% this year, outpacing all other sectors. Major stock indexes eked out gains yesterday despite one-day declines in megacap tech stocks propelling economically sensitive sectors of the market.
This week’s inflation reports and the upcoming second-quarter earning season provide some of the next tests for stocks.