Technology Powers 12 of the S&P 500’s 13.6 Points This Year

By Amara Osei

Technology contributed roughly 12 points of the S&P 500’s 13.6-point return this year, according to an analysis from Silvia Insights. With technology now representing nearly 40% of the market, buying the broad index has become a concentrated bet on one sector.

The S&P 500 has set 28 new record highs this year even as the gains remained concentrated among a small group of winners. Nine of the index’s 11 sectors trail the benchmark so far, and only technology and energy have outperformed, according to Phil Rosen’s analysis for Opening Bell Media.

Rosen is co-founder and CEO of Opening Bell Media and chief market strategist at Silvia. He framed the concentration directly: “Buying the S&P 500 today is simply a bullish call on tech.”

How narrow has market leadership become?

Technology supplied nearly all of the index’s year-to-date gain, with roughly 12 points of the 13.6-point return. That performance reflects Rosen’s central finding: a few large technology names are carrying a market that otherwise shows limited sector participation.

Energy is the only other outperformer. It represents about 3% of the market, so its gains—fueled by elevated oil prices and the power demand underpinning the AI boom—barely register at the index level, Rosen said.

Remove both leaders, and the median sector is barely up 1% year to date. Four of the remaining nine sectors are negative, according to Rosen’s figures.

Those figures show that record-setting performance has not spread evenly across business sectors. Rosen’s analysis attributes most of the index’s year-to-date upside to technology and a small number of mega-cap names.

What puts the rally at risk?

Rosen said the entire index could falter if a handful of mega-cap technology companies lose ground. With technology close to 40% of the market, those companies now have an outsized ability to determine the direction of the benchmark.

Rosen called the rally an AI-driven bull market with a heavy technology bias. He said buying a market that lives or dies by technology is not so dreadful in the AI era. He also noted that the technology sector is cheaper than it has been in years.

Does valuation provide a cushion?

Tatiana Darie, a macro strategist at Bloomberg, supported that point with a chart measuring the spread between the S&P 500’s and information technology sector’s forward price-to-earnings ratios. “The spread between the S&P 500 and information technology sector’s forward P/E ratios has fallen to levels last seen at the start of the pandemic,” Darie said on Full Signal.

Her chart supports Rosen’s view that technology is cheaper relative to the S&P 500. The forward P/E spread has narrowed to a level last seen at the start of the pandemic, giving the sector a more favorable valuation backdrop without removing the index’s concentration risk.

What should investors watch next?

Rosen’s figures show that this year’s 28 record highs have not produced broad sector strength. With nine of 11 sectors lagging and four negative after excluding technology and energy, further gains remain tied to a narrow set of winners.

Rosen attributes energy’s gains to elevated oil prices and power demand for AI. The roughly 3% market weight limits that effect on the index, and a change in either condition could alter energy’s contribution.

Technology’s mega-cap performance remains the main driver of the broad benchmark, according to Rosen’s analysis. His figures make the trade-off clear for investors choosing the S&P 500: they own a technology-heavy benchmark and accept concentration risk.

The relative-valuation case makes technology more attractive, while elevated oil prices and AI-driven power demand support energy’s gains. The index remains vulnerable if its largest technology companies retreat. Until leadership broadens beyond technology and energy, further record highs will depend more on mega-cap technology performance than on the health of the wider market.