The breadth trade's latest plot twist: Big tech roars back

U.S. equity index futures rise; Nasdaq 100 up ~0.7% Q2 Employment Costs 0.9% vs 0.8% estimate Euro STOXX 600 index up ~0.3% Dollar gains; U.S. crude up >2%; gold, bitcoin both off >1% U.S. 10-year Treasury yield rises to ~4.70% Thursday, however, offered a sharp reminder that the market's biggest companies can still lead the charge. As big-cap technology stocks reasserted themselves, the SPXEW/SPX ratio suffered its biggest one-day drop since November 2020. The question now is whether that abrupt reversal marks the start of another swing back in favor of the market's largest companies. From a technical perspective, a drop back below the 200-day moving average would raise the risk of a return to the lows. On the other hand, bulls are focused on a bigger hurdle: ending the pattern of lower highs and lower lows that has defined the ratio since early 2023. A close above 1.205 would break that trend and suggest a more sustained period of equal-weight leadership may be underway. (Terence Gabriel) ***** EARLIER ON LIVE MARKETS: - HOW BOND VIGILANTISM CAN HIT STOCKS CLICK HERE - HALF-TIME IN EUROPE: SLOWING MOMENTUM CLICK HERE - AI BULLS AND BEARS CLICK HERE - WINNERS AND LOSERS OF THE YEAR SO FAR CLICK HERE - RECORDS ALL AROUND CLICK HERE - EUROPE BEFORE THE BELL: GRINDING HIGHER AT MONTH-END CLICK HERE - YEN SINKS AS BOJ HOLDS - AND IT'S THE KOSPI'S BEST DAY CLICK HERE SPXEWSPXRatio07312026 (Terence Gabriel is a Reuters market analyst. The views expressed are his own) One of the clearest signs this year that the rally has broadened beyond the mega-cap names has been the performance of the Equal-Weighted S&P 500 `.SPXEW` relative to the traditional cap-weighted S&P 500 `.SPX`. So far in 2026, the equal-weighted index has gained 12.4%, comfortably ahead of the S&P 500's 8.7% advance. If that holds, it would mark the first year of equal-weight outperformance in four years. That said, the path has been anything but smooth. After bottoming in October 2025, the SPXEW/SPX ratio began a steady climb, reaching 1.205 in late February and leaving it up more than 6% for the year. But the move quickly unraveled. The ratio plunged to a fresh low of 1.099 on May 15, its weakest level since April 2003, leaving it down just over 3% year to date. The tide turned again in mid-May. The equal-weighted index resumed its outperformance, the ratio climbed back above its 200-day moving average and, by Wednesday's close, had rebounded to 1.195, putting it up a little more than 5% for the year.

The breadth trade's latest plot twist: Big tech roars back

Market snapshot

Big tech reasserts itself

What traders are watching

Equal-weight outperformance has been choppy

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