#分享美股交易赢英伟达股票 Index Reaches New Highs, Structural Cracks Emerge: The U.S. Stock Market's Extreme Concentration Signals a Turning Point, June's Rally Faces Downside Risks

Recently, the S&P 500 index has continuously hit new historical closing levels along its upward channel, with a nine-day winning streak on the daily chart and a rare nine-week consecutive rise on the weekly chart. Beneath the seemingly strong market performance, the internal structural divergence is reaching decades-long extremes.
Relying on the momentum of AI industry prosperity, leading stocks have formed a concentration bubble, causing the broader market to deviate from the fundamentals of most individual stocks. Several major overseas institutions have issued warnings from three perspectives: market breadth, sector differentiation, and historical valuation patterns—extreme weightings hijacking the index are unsustainable. Once the AI trend wanes, even if small and mid-cap stocks rally collectively, they will struggle to offset the downward pressure on the index. The major turning point of this bull market is likely to occur in June.
From micro-level market data, abnormal divergence between advancing and declining stocks has become a normalized feature of the current U.S. stock market. Data from Dow Jones shows that the S&P 500 has experienced six consecutive trading days of divergence—index gains while individual stocks mostly decline—with the number of declining stocks each day exceeding those advancing.
BTIG’s chief market technician Jonathan Krinsky’s historical analysis since 1996 indicates that in past bull cycles, such extreme divergence typically lasted only three trading days. A six-day divergence is unprecedented in market history, visually confirming that the index’s rise has long been detached from overall market fundamentals and is fully driven by a handful of top-weighted stocks.
Rob Anderson, strategist at Ned Davis Research, further supports this view with social media data: the proportion of stocks outperforming the S&P 500 benchmark in the past two months has fallen to its third-lowest level since 1972, indicating that the structural differentiation in the U.S. stock market is among the most severe in half a century. Extreme concentration of holdings is a core factor behind the collapse of market breadth.
Currently, in the S&P 500, a few tech giants led by information technology have seen their weightings surge to nearly 40%, setting a record since the index’s inception. The top ten stocks now account for 40% of the total market capitalization, with ongoing capital inflows concentrated into AI computing power and software leaders, squeezing other sectors’ allocation space.
Industry data over the past five trading days clearly reveal this divergence: only technology and energy sectors posted positive returns, with technology soaring 5.9% in a single cycle, becoming the sole pillar of the rally, while energy rose only slightly by 0.3%. Meanwhile, defensive sectors like real estate, utilities, and communication services all declined over 3%, and many stocks in cyclical and consumer segments continued to fall, creating a stark contrast between market prosperity and sector depression.
During the upward phase of the concentration rally, the market’s top stocks’ market cap advantage can offset the drag from declines in small and mid-cap stocks, forming a “few stocks supporting the entire market index” pattern. However, this logic is inherently fragile.
Krinsky’s latest report warns that such highly concentrated holdings pose a risk of reverse contagion: if profit expectations for AI decline or funds start to exit the concentrated positions, the leading stocks’ single-sided rise will end, and a mass exodus of capital could break the index’s support levels. Unlike a diversified bull market, in this cycle, small and mid-cap rebounds are unlikely to offset the losses from weightings, and a reverse divergence—most stocks rising while the index falls—may occur. June could be a critical window for a trend reversal.
Apart from the AI industry’s benefits and the temporary disruptions caused by Middle Eastern geopolitical conflicts, the nearly 16% rise in the S&P 500 over the past two months places it among the fastest post-WWII gains. Market analysis warns that historical data signals potential risks: only four periods in post-war history have seen similar range-bound gains, three of which occurred during economic recovery phases after recessions—such as the end of the 1970s oil crisis, the 2008 subprime crisis bottom, and the post-2020 COVID-19 recovery. The only rapid surge outside recession recovery was just before the 1987 Black Monday crash, with historical cycles overlapping and raising valuation concerns.
Reviewing the 1987 crash environment, by late September, the S&P 500 had already gained 36.2% for the year, with rapid valuation bubbles forming. The Fed was in a rate-hiking cycle, compounded by U.S. trade and fiscal deficits, which heightened market risk appetite. Multiple negative factors converged, triggering a single-day index plunge.
Comparing to current fundamentals, the Fed’s monetary policy path, global inflation fluctuations, and U.S. fiscal deficits continue to influence market pricing. The valuation premiums driven by AI concepts have diverged from some companies’ earnings, and the reference value of historical patterns remains high.
Looking at macro variables in June, historical patterns suggest that this month often sees many events—such as Fed meetings, key employment and inflation data, and quarterly guidance from leading companies—that could trigger a break in the current concentration. Many institutions believe that if the Fed delays rate cuts, high-valuation AI leaders will be the first to see valuation compression, causing the index rally supported by heavyweights to weaken rapidly. Even if small and mid-cap stocks benefit from low valuations and recover, limited overall market capital and the disproportionate weightings mean that local rebounds cannot reverse the overall downward trend.
From a global asset allocation perspective, this structural bull market in U.S. stocks serves as a warning beyond the domestic market. In an environment of converging global liquidity and increasing divergence in asset valuations, index overvaluation driven by sector concentration often harbors tail risks. Cross-border investors should abandon the mindset that “new highs mean a stronger market,” look beyond index levels, and focus on three core indicators: market breadth, concentration of holdings, and earnings realization, remaining alert to systemic risks from potential AI sector corrections in June.