The U.S. stock market is facing two realities: as artificial intelligence (AI) behemoths drive the broader S&P 500 to impressive heights, the rest of the market is stalling, resulting in a "historic concentration" not seen in over a century, where the 500 index stocks without AI-related companies are up "just 1.04%."
A Century-Old Market Distortion
According to an analysis by Jim Bianco, president of Bianco Research, the modern stock market is experiencing an unprecedented level of thematic crowding.
At their peak, AI-related stocks commanded a staggering 49% of the S&P 500, as visualized in the data shared by Bianco.
“This is the most concentrated the stock market has been on a single theme since the railroad stocks of the late 19th century,” Bianco noted. He warned that this market density is poised to climb even higher when Anthropic and OpenAI are also listed, along with Space Exploration Technologies Corp. (NASDAQ:SPCX).
The Great AI Divergence
The performance gap between AI enablers and ordinary corporations has widened since late February. While the S&P 500 posted an 8.03% gain, stripping away the 41 key AI-related equities leaves the remaining index virtually flat at a mere 1.04% return.
This decoupling became obvious during a brief market correction. Between June 2 and June 10, the broader S&P 500 corrected by roughly 4.5%. Yet, as illustrated by the Goldman Sachs Thematic Indices in Bianco’s post, the 500 stocks excluding AI actually rose during that exact window.
How Have Markets Performed In 2026?
The S&P 500 index has advanced 8.35% year-to-date. Similarly, the Nasdaq Composite index was up 11.42%, and the Dow Jones gained 5.83% YTD.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, closed higher on Friday. The SPY ended up 0.54% at $741.75, while the QQQ was higher by 0.59% to $721.34.
Meanwhile, Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), closed 0.73% higher on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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