Market in Review: Market Gains, Broader Participation and Year-End Planning

Overall year-to-date equity returns have been strong. However, a significant shift in market dynamics has taken hold under the surface. Encouragingly, companies leading the market higher have broadened beyond a small group of mega-cap companies (Mag 7) into value and small cap stocks both in the US and globally. Although the largest technology companies still account for much of the market’s growth, gains are now being shared by a wider range of businesses, including manufacturers, banks, healthcare companies, and smaller value stocks

What is Driving the S&P 500?

Through early September 2026 the S&P 500 Total Return Index gained ~12%. Over the same period, the Magnificent Seven returned approximately 9%.  The remaining “S&P 493” companies produced an estimated total return of approximately ~13%. In other words, the broader S&P 493 outpaced both the full index and the Mag 7, which has not happened over the last 4 years. We believe this broadening out of returns is a healthy sign. The J.P. Morgan Asset Management charts below illustrate this multi-year trend and the performance breakdown between the Magnificent 7 and the broader index.

• Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
• Magnificent 7 (Mag 7) includes AAPL, AMZN, GOOGL/GOOG, META, MSFT, NVDA and TSLA. The S&P 500 ex-Mag 7 (S&P 493) is calculated by backing out a weighted average Mag 7 price return from the S&P 500 price return. *Return share represents the Mag 7’s contribution to the index return. Past performance is no guarantee of future results.Guide to the Markets – U.S. Data are as of September 11, 2026. Guide to the Markets – U.S. Data are as of September 11, 2026

Why Broad Diversification Still Matters

The shift from technology-only company dominance to broader participation underscores the critical importance of broad diversification. A market led by a limited number of very large companies can reward concentration for a time, but leadership changes. Broad diversification across companies, sectors, investment styles, asset classes, and geographies remains one of the most dependable ways to manage that uncertainty without trying to predict the next market leader.

Looking Ahead

As we push through towards the end of 2026, we will look for opportunities to lower current YTD 2026 capital gains.  As previously mentioned, this year has seen strong equity gains, but if opportunities exist to harvest some losses and reduce tax liabilities, we will seek these out.  These actions and any general rebalancing we might think necessary, will be done in the spirit of maintaining well diversified, resilient portfolios.