The S&P 500 rallied to records on the back of just one sector

The S&P 500 is back at record levels for the first time in two years. Information technology is the only one of the index's ll sectors that can say the same.

- Hardika Singh

Home to the likes of Microsoft, Apple and Nvidia, the tech sector is riding the mania over artificial intelligence and has propelled the broader market to a record close in five of the last six trading sessions. The S&P 500 is up 2.5% to start 2024, while the tech segment has risen 5.9%.

The 10 other sectors are trading an average of 15% below their all-time highs, and none has set a new record in January. The equal-weighted S&P 500, which gives the same status to the smallest and largest companies in the index, is down 0.3% this year.

The market's rally was much wider two years ago. Seven other sectors - industrials, financials, consumer staples, real estate, healthcare, utilities and materials - joined tech to trade at new highs in the two weeks preceding the S&P 500's January 2022 record.

A narrow rally is a potentially worrying sign to some investors and strategists. When just a handful of big stocks are responsible for most of the market's gains, it becomes more vulnerable to a downturn if a few of those heavyweights stumble, they say.