Big Tech stocks propel S&P 500 higher after midterm elections

The S&P 500 on Wednesday was attempting to rally back above its 50-day moving average.

A historic divergence has split the U.S. stock market: The benchmark S&P 500 index has tumbled into deeply oversold territory even as nearly half of its constituent stocks remained decidedly overbought.

Paul Hickey, co-founder of Bespoke Investment Group, said in commentary shared with MarketWatch that the push and pull has resulted in some of the most unbelievable charts he has ever seen.

The S&P 500's SPX recent drop below its 50-day moving average took it into "extreme oversold" territory this month - yet, almost 47% of the index's components landed at "overbought levels" on Nov. 2, according to Bespoke Investment Group.

Extreme readings for the S&P 500, as seen in the chart below, occur a handful of times a year. But the fact that this is happening while a significant share of index members move in the opposite direction is unprecedented going back to at least 1990, according to Bespoke.

There have been examples of similar divergences in the past, but they have been extremely infrequent, and much less extreme.

Bespoke had tallied only five other days since 1990 when the S&P 500 finished more than two standard deviations below its 50-day moving average while more than a quarter of its stocks screened as overbought. Two of those trading sessions were in December 2000, another was in August 2024, and more recently, two occurred in March 2025, the Bespoke note shows.

"It is a function of the concentration in the market," Hickey told MarketWatch by phone Wednesday. A handful of tech and tech-adjacent stocks have amassed unparalleled influence over the direction of the index. That has created a situation where the S&P 500 often trades lower, even as most of its members move higher. On days when the index's "big generals" struggle, the index often does, too - even as investors appear to be shifting capital into other parts of the market.

On Wednesday, the S&P 500's rally was propelled by Big Tech, as investors weighed U.S. midterm elections resulting in Democrats taking control of Congress.

The S&P 500 was attempting on Wednesday to break back above its 50-day moving average, of 7,692.71, according to FactSet data.

-Christine Idzelis