Median Stock Struggling To Stay Afloat

The index is buoyed by strength in its largest sector while conditions beneath the surface act as an anchor

Key Takeaway: Even with the August pullback, the S&P 500 has remained comfortably in positive territory for the year. The same cannot be said of the median stock in the index. At one point last week, the median S&P 500 stock found itself up less than 2% on a YTD basis.

More Context: This divergence corrects performance discrepancies from 2022. Last year the S&P 500 was down 19% and the median stock was down only 14%. Even still, it is hard to make the case that a broad and healthy advance is underway when it is the end of August and the median stock in the index is barely up on the year. Rather, as we discuss in the week's Market Notes and Chart Pack, this reflects an environment where the tape has turned south and bull market behavior is becoming harder to find.

The index remains buoyed by strength from its largest sector and largest stocks. This masks more challenging conditions beneath the surface. It is inconsistent with the quiet strength that we saw in June and July and which has been associated with the strongest and healthiest markets of the past.