Graphic: Large stocks driving S&P 500’s gains
Following a year in which the S&P 500 lost 18.1%, the index has rebounded to return 16.7% through July 11. The gains haven't been distributed evenly, though, with 156 stocks outperforming the overall index, creating high growth expectations for some stocks and sectors that may not continue. For broad-based active portfolios, this could present an opportunity to outperform passive accounts should the situation reverse.
Larger stocks outperform: The S&P 500's 16.7% total return topped the S&P 500 Equal Weight index's 8.4% return through mid-July, a reversal from the previous two years.
Total returns
Top 10: Year to date, eight of the 10 top-weighted stocks in the S&P 500 have outperformed the overall index — including three stocks that have more than doubled
Top stocks' weights, returns
| Stock | Index weight | YTD return* |
|---|---|---|
| Apple | 7.5% | 45.2% |
| Microsoft | 6.7% | 39.3% |
| Amazon.com | 3.1% | 53.3% |
| NVIDIA | 2.8% | 190.2% |
| Tesla | 2.0% | 119.0% |
| Alphabet Class A | 1.9% | 32.8% |
| Meta Platforms Class A | 1.8% | 147.9% |
| Berkshire Hathaway Class B | 1.7% | 11.2% |
| Alphabet Class C | 1.6% | 32.7% |
| UnitedHealth Group | 1.2% | -12.0% |
| All others** | 69.9% | 9.0% |
Sector variability: Weights of the information technology and communication services sectors — which have returned 41% and 36.2%, respectively, so far this year — are much higher in the S&P 500 index than in its equal-weighted counterpart. However, the P/E ratio for the IT sector has grown to 30 from 20, and the multiple for communication services has increased to 21, up from 15 at year-end.
Sector weights and valuations
| Sector | Weight in S&P 500 | Weight in S&P 500 Equal Weight | Current P/E* | Change from year-end 2022 |
|---|---|---|---|---|
| Industrials | 8.5% | 15.5% | 21 | -1 |
| Financials | 12.4% | 14.0% | 15 | 2 |
| Health care | 13.4% | 13.1% | 17 | 1 |
| Information technology | 28.3% | 13.1% | 30 | 10 |
| Consumer discretionary | 10.7% | 10.9% | 32 | 6 |
| Consumer staples | 6.7% | 7.2% | 21 | -1 |
| Real estate | 2.5% | 6.1% | 19 | 1 |
| Materials | 2.5% | 5.8% | 16 | 2 |
| Utilities | 2.6% | 5.8% | 20 | — |
| Energy | 4.1% | 4.5% | 8 | -1 |
| Communication services | 8.4% | 4.0% | 21 | 6 |
Sector returns
*As of July 11. **Average return. Some totals may not sum to 100% due to rounding. Sources: Bloomberg LP, State Street Global Advisors, S&P Dow Jones Indices LLC
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