The S&P 500 Just Did Something It’s Only Done 3 Times Before. Why Trump’s AI Rally Is in Danger

1 week ago 7

Rich Duprey

Sun, May 10, 2026 astatine 1:03 PM CDT 5 min read

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Nvidia (NVDA), Alphabet (GOOG), and Meta Platforms (META) collectively correspond astir 38% of the S&P 500’s weighting, with mega-cap tech stocks dominating scale gains portion hundreds of S&P 500 components deed caller 52-week lows—a awesome that antecedently appeared successful July 1929, January 1973, and December 1999, each preceding large carnivore markets.
The Shiller P/E ratio sits adjacent its second-highest speechmaking successful past with lone November 1999 exceeding existent valuation levels, meaning investors are paying grounds prices for AI net maturation that whitethorn instrumentality years to materialize portion the rally progressively depends connected a shrinking radical of stocks to proceed climbing.
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The banal marketplace keeps climbing walls investors hardly look to announcement anymore. The S&P 500 conscionable deed different all-time high, extending a rally that has added astir 50% since the tariff-driven panic debased successful April 2025.

President Donald Trump's taxation cuts, deregulation push, and pro-business policies embedded successful the One Big Beautiful Bill Act person helped substance that surge. Corporate profits stay healthy, unemployment is low, and artificial quality spending continues pouring rocket substance connected Big Tech earnings.

But beneath the surface, thing looks off. And past suggests astute investors should wage attention.

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An Historic Warning Sign Just Flashed

On Friday, the S&P 500 reached a caller grounds precocious portion 5.6% of its components simultaneously deed caller 52-week lows. Independent concern probe steadfast Hedgeye Risk Management notes this has lone happened 3 different times successful history:

July, 1929
January, 1973
December, 1999

That is not precisely comforting company. Those dates came soon earlier 3 of the worst carnivore markets investors person ever endured. The 1929 highest preceded the Great Depression crash. The 1973 awesome arrived earlier the brutal stagflation-era illness and the onset of the alleged "Lost Decade." December 1999 marked the last euphoric signifier of the dot-com bubble.

Granted, past does not repetition perfectly. Markets are driven by antithetic economical conditions, antithetic Federal Reserve policies, and antithetic technologies each cycle. But marketplace breadth deterioration this terrible portion indexes marque caller highs is uncommon for a reason. The market's header numbers whitethorn beryllium hiding weakness underneath.

The Trump Bull Market Is Narrower Than It Looks

President Trump's economical docket has unquestionably helped ignite capitalist optimism. The hold of firm taxation cuts, accelerated depreciation rules, and regulatory reforms done the OBBBA boosted expectations for net maturation crossed aggregate sectors.

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