This market's wild ride could go even further

Much about the market's features is setting off alarm bells, but some aspects manage to provide comfort

- Natale Labia

The S&P 500 is sitting just below its all-time high. Bitcoin and gold are pressing up against theirs too. Investment-grade credit spreads are as tight as they were when Bill Clinton was supposedly only smoking cigars in the Oval Office. The Treasury market is serene to the point of somnambulance. As the Bard might have asked, is something wicked this way coming?

Several features of today's markets look undeniably unusual. First is the unprecedented level of concentration. A small number of technology juggernauts continue to generate an outsized proportion of returns, leaving all other equities in their wake.

Although there are tentative signs of a broader rally taking shape, with market participation improving modestly in recent weeks, the top-line performance since the April nadir has been overwhelmingly down to a handful of names.

According to Bloomberg data, the 10 largest companies in the US now account for more than 40% of total S&P 500 market capitalisation, and a staggering 56% of returns since US President Donald Trump's disastrous tariffs announcement on 2 April.