Three "fatal cracks" have appeared beneath the calm surface of the US stock index.

SnapshotLaborer · 2026-02-24T21:25:40+00:00

Entering 2026, despite the seemingly calm appearance of the S&P 500 Index, the equal-weighted index has already risen by 6.4%. The seven giants have fallen by 5%, leading to a divergence in stock market performance, with dispersion reaching a historic high, indicating potential cracks in the market.

SnapshotLaborer

2026-02-24 21:25:40

Abstract generation in progress

By 2026, the S&P 500 index is almost unchanged; on most surface indicators, the market appears quite calm: the Bollinger Bands have narrowed to their tightest level in five years, and the index’s trading range has hit the narrowest in 60 years.

But this apparent calm is actually an illusion: the equal-weighted S&P 500 has risen rapidly by 6.4% since the beginning of the year, while the market-cap-weighted S&P 500 has remained flat; the reason for this gap is that the “Big Seven” U.S. stocks have collectively fallen about 5%, while over 60% of the stocks in the S&P 500 have outperformed the index.

The S&P 500 dispersion index has risen from 29.54 at the end of 2025 to approximately 35.92 on February 20, 2026, currently placing it in the 99th percentile over the past 30 years. (High dispersion means large performance divergence among individual stocks—some soar while others plummet.)

The reason for this situation is that beneath the deceptive calm surface, three “fatal cracks” have emerged.

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