Analyzing the S&P 100 to Gauge Market Health Beyond the S&P 500

Take a moment to step back from the S&P 500 and examine what the S&P 100 reveals. Recent analysis suggests that the commonly followed S&P 500 index and its ETF counterpart, SPDR S&P 500 (SPY), may have been misleading investors by focusing heavily on a handful of top-performing stocks, while many others contribute little to overall returns. Even within the top 100 companies, there's notable dispersion, indicating uneven weightings among these firms. This disparity could become more significant in the latter half of 2025. Wall Street acknowledges that a small group of giants—often called the 'Magnificent Seven'—dominate the market, with substantial investments concentrated there. As a result, the broader market's fluctuations might go unnoticed in headlines, despite underlying vulnerabilities. Two ETFs exemplify this divergence: the Invesco S&P 100 ETF (OEF), with $21 billion in assets tracking the top 100 S&P 500 stocks since 2000, and the Invesco S&P 100 Equal Weight ETF (EQWL), with about $1.5 billion, which rebalances the same stocks equally. OEF's portfolio, with an average market cap nearing $865 billion—nearly a trillion dollars—shows high concentration, with seven compani...