S&P 500 Holds Near Record as 84% of Stocks Sit at Least 10% Below Peaks

The S&P 500 is roughly 2% below its record high, but 84% of its stocks are at least 10% below their own peaks. The split shows how the index can remain near a high while gains are concentrated in a small group of companies.

The pullbacks run deeper for many members: 59% are at least 20% below their peaks, 41% are down more than 30%, and 17% have fallen more than 50%. Ten stocks accounted for 70% of the S&P 500’s rebound since March 30.

Interest-rate expectations have also shifted. At the start of 2026, investors expected at least three Federal Reserve rate cuts during 2026, totaling 75 basis points. The Fed has since raised rates once, and markets expect three more increases by June 2027.

Oil prices above $100 and inflation near 4% are weighing on valuations even as the S&P 500 stays near its high. Earnings strength at large technology companies has supported the index.

The S&P 500’s blended earnings growth rate reached 52% in the second quarter of 2026, its highest level since the second quarter of 2021. Over the past 12 months, Nvidia shares rose 21% while the company’s price-to-earnings ratio fell 46%. Nvidia’s forward price-to-earnings ratio is about 24, near the S&P 500’s 22.

Large technology companies’ earnings growth and their valuation discount underpin the bullish case. The index’s concentration may be favorable or, at least, has not become a problem so far.

If the Iran war shows signs of ending and the global energy crisis eases, energy prices and inflation expectations may fall. That could make a more dovish Fed stance possible and help gains spread beyond the largest technology companies.