RT Phil Rosen: The average S&P 500 stock is destroying the most valuable Big Tech names in history. - Equal weight S&P 500 at cheapest level in 23 yea...
The average S&P 500 stock is outperforming major Big Tech names, with the equal-weight S&P 500 at its cheapest level in 23 years while the market-cap-weighted S&P 500 trades at a 28% premium — a divergence not seen in six years.
Background
The S&P 500 index is market-capitalization-weighted, meaning the largest companies (like Apple, Microsoft, Nvidia) dominate its performance. An "equal-weight" S&P 500 treats every stock the same regardless of size. When the equal-weight version trades cheaply while the regular index is expensive, it signals that a handful of megacap tech stocks are propping up the overall market, while most other companies are struggling or undervalued. The last time this gap was this wide was around 2018—just before a major market rotation. Pompliano and Rosen are noting this divergence as a potential shift away from the "Big Tech" rally that has defined recent years.