S&P 500, Nasdaq hit records — but 'the breadth of the rally has narrowed': Chart of the Day Ines Ferré · Senior Business Reporter Wed, October 7, 2026 at 6:00 AM EDT 2 min read ^GSPC +0.58% ^IXIC +0.45% AMD +2.80% NVDA +0.14% MSFT +0.78% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Stocks are sitting at record highs, but under the hood, it's the AI megacaps driving the gains. The rest of the market is flat or lagging.
"The breadth of the rally has narrowed," UBS's Ulrike Hoffmann-Burchardi warned on Tuesday.
The strategist noted that the percentage of US stocks trading above their recent price trends has fallen to levels last seen in March, a sign that fewer stocks are participating in the rally.
The trend has been gaining steam over the past month. At the end of last quarter, just 25% of S&P 500 constituents were currently trading above their 50-day moving average, according to Citadel research.
While the S&P 500 (^GSPC) gained 2% in Q3, the S&P 500 Equal Weight fell 2%, and the Russell 2000 (^RUT) fell 7%.
The touchstones of the AI trade are keeping the indexes higher.
Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT) represent over 21% of the index, according to data from Creative Planning.
Nvidia touched an all-time high on Tuesday, along with peer AMD (AMD). Apple and Microsoft are both sitting near their record highs, as seen on Yahoo Finance's AlphaSpace chart.
In recent sessions, Taiwan Semiconductor (TSM), optical AI player Lumentum (LITE), and cybersecurity stocks have hit record or recent highs as demand for AI infrastructure and agentic AI surges.
UBS warned against overexposing to a narrow group of leaders and advised broadening portfolios.
"We retain strong conviction in the AI growth story," Hoffmann-Burchardi wrote. "But the increasing concentration of market gains reinforces the importance of managing risk through a broadly diversified equity portfolio."
Ines Ferre is a Senior Business Reporter for Yahoo Finance covering the US stock market, publicly traded companies, and commodities.
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