Record S&P 500 Masks Broad Stock Declines Before Midterm Elections

Although the S&P 500 is near a record, many individual U.S. stocks are already in a stealth bear market, with more than half down over 20% from their peaks. Four megacaps including Nvidia and Meta added roughly 300 index points while the other 496 S&P members collectively lost about 150. Strategist Mike Wilson warned the index could fall to 7,300 if bond volatility remains high, though a Hidden Bear signal has historically preceded gains 93% of the time.

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The S&P 500 was roughly 0.1% under its Oct. 6 record, yet separate tallies showed deep weakness beneath the surface. One measure found 56% of eligible U.S. stocks more than 20% below their highs on Oct. 12, with the median stock 24.3% lower. Mike Wilson counted 51% of Russell 3000 members down more than 20% from June peaks, up from just over 40% two weeks earlier.

Other readings differed by universe and peak: 34.8% of S&P 500 members were more than 20% below 52-week highs at the Oct. 9 close, while MarketWatch cited 44% earlier that month. The equal-weight S&P 500 sat about 4.4% below its Aug. 14 high. Semiconductors were especially weak, with 96% down more than 20% from June highs versus about 4% of banks.

Count words. First para: The(1) S&P(2) 500(3) was(4) roughly(5) 0.1%(6) under(7) its(8) Oct.(9) 6(10) record,(11) yet(12) separate(13) tallies(14) showed(15) deep(16) weakness(17) beneath(18) the(19) surface.(20) One(21) measure(22) found(23) 56%(24) of(25) eligible(26) U.S.(27) stocks(28) more(29) than(30) 20%(31) below(32) their(33) highs(34) on(35) Oct.(36) 12,(37) with(38) the(39) median(40) stock(41) 24.3%(42) lower.(43) Mike(44) Wilson(45) counted(46) 51%(47) of(48) Russell(49) 3000(50) members(51) down(52) more(53) than(54) 20%(55) from(56) June(57) peaks,(58) up(59) from(60) just(61) over(62) 40%(63) two(64) weeks(65) earlier.(66) Good.

Second: Other(1) readings(2) differed(3) by(4) universe(5) and(6) peak:(7) 34.8%(8) of(9) S&P(10) 500(11) members(12)