The Markets
It’s all about how you slice the index pie.
Last week, the Standard & Poor’s 500 Index (S&P 500) closed at a new record high even though 329 of its 500 stocks lost value, reported Connor Smith of Barron’s.
How is that possible? The S&P 500 is a capitalization-weighted index.
Imagine the S&P 500 as a pie. Each stock in the index is one slice of that pie, and all of the slices are different sizes. The size of each company’s slice is determined by its market capitalization. (Market capitalization is a stock’s share price times the number of shares outstanding). For example, if:
- Company A has a stock price of $50 and 100 shares outstanding, then it has a capitalization of $5000.
- Company B has a stock price of $100 and 1000 shares outstanding, then it has a capitalization of $100,000.
If both companies were in the S&P 500, Company B would be a bigger slice in the index pie.
One of the companies with the largest slices of S&P 500 pie is a chipmaker with a share price of about $200 and more than 20 billion shares outstanding. Its capitalization was recently more than $5 trillion.
A company of this size is called a mega-cap company because it’s so large. When mega-cap company stocks gain value, they can pull the entire S&P 500 up, even when smaller companies are flagging, reported Adam Hayes of Investopedia.
In contrast, if the S&P 500 was equal-weighted, every company’s slice would be the same size. As a result, every stock would have equal influence, so the index’s performance would reflect the performance of all of the companies. If most stocks were falling, then an equal-weighted index would probably move lower.
From a practical perspective, when a capitalization-weighted index is rising, and most of its stocks are falling, then a handful of sizeable companies are performing exceptionally well. Last week, a small group of companies in the S&P 500 did exceptionally well.
It’s still early in earnings season, which is the time when companies let investors know how they performed in the previous quarter. With 28 percent of S&P 500 companies reporting actual results so far, the index is on track to report its highest net profit margin (+13.4 percent) in more than 15 years. The Information Technology sector is leading the way with profits for the companies that have reported so far up 29.1 percent in the first quarter of 2026 compared to up 25.4 percent in the first quarter of last year, according to John Butters of FactSet.
“Semiconductor stocks are in the midst of a historic run, a winning streak that is every bit as impressive as Joe DiMaggio’s famous stretch of 56 straight games with a hit,” reported Paul R. La Monica of Barron’s.
Last week, the S&P 500 and Nasdaq Composite finished the week higher, while the Dow Jones Industrial Average lost value. In addition, yields on longer maturities of U.S. Treasuries moved higher over the week.
| Data as of 4/24/26 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|---|---|
| Standard & Poor's 500 Index | 0.6% | 4.7% | 30.6% | 20.1% | 11.3% | 13.1% |
| Dow Jones Global ex-U.S. Index | -1.6 | 7.7 | 31.1 | 14.2 | 5.1 | 6.4 |
| 10-year Treasury Note (yield only) | 4.3 | N/A | 4.3 | 3.5 | 1.6 | 1.9 |
| S&P GSCI Gold Index | -2.8 | 9.2 | 41.6 | 33.3 | 21.6 | 14.4 |
| Bloomberg Commodity Index | 3.5 | 24.1 | 32.3 | 8.7 | 8.7 | 5.1 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
Retirement Confidence Falls
Stock markets have been climbing higher, but many Americans are feeling less optimistic about retirement. In fact, retirement confidence in the United States dropped significantly in 2026 on worries about Social Security, Medicare and inflation, according to the 2026 Retirement Confidence Survey conducted by the Employee Benefits Research Institute and Greenwald Research.
In 2026, American workers are less confident than they were in 2025 that they’ll have enough money to pay for basic expenses in retirement. Just 58 percent of workers and 71 percent of retirees are confident they will have enough money to keep up with inflation and cost of living in retirement. People who participated in the Retirement Confidence Survey were:
| Working Americans | Retired Americans | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| At least somewhat confident I’ll have enough money to live comfortably in retirement. | 61% | 67% | 73% | 78% |
| Concerned the U.S. government will make significant changes to the American retirement system. | 78% | 79% | 69% | 71% |
| Confident Social Security will provide similar benefits in the future. | 50% | 51% | 60% | 65% |
| Confident Medicare will provide similar benefits in the future. | 52% | 53% | 62% | 70% |
Alicia Munnell and Gal Wettstein of the Center for Retirement Research at Boston College reported on a survey that found Americans across the wealth spectrum have become more concerned about the impacts of potential changes to Social Security and Medicare on their retirement plans. The concerns have led some to begin saving more for emergencies, delaying retirement, and/or investing more conservatively.
Decisions like these should not be made lightly. For example, investing more conservatively may be a sound choice or it could a choice that makes it more difficult to reach a comfortable retirement. It depends on individual circumstances and goals. Investing conservatively can reduce short-term ups and downs, but it also can limit long-term growth potential and the benefits of compounding.
If you have questions about retirement, please get in touch. We’re happy to review your plan or help you build one.
Weekly Focus – Think About It
“Plans are nothing; planning is everything.”
—Dwight D. Eisenhower
Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management
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- Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
- Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
- The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
- All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
- The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
- The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
- Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
- The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
- The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
- International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
- Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
- Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
- Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
- Past performance does not guarantee future results. Investing involves risk, including loss of principal.
- You cannot invest directly in an index.
- Stock investing involves risk including loss of principal.
- The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted and are subject to change. Investing involves risk including loss of principal.
- The Price-to-Earning (P/E) ratio is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means investors are paying more for each unit of net income, thus, the stock is more expensive compared to one with a lower P/E ratio.
- The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
- Consult your financial professional before making any investment decision.
https://www.barrons.com/livecoverage/stock-market-news-today-042426/card/the-s-p-nasdaq-hit-fresh-highs-market-breadth-is-terrible--LSnyu8Ofaq3jG05pVN45 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/04-27-26-Barrons-The-S&P-Nasdaq-Hit%20-%201.pdf
https://www.investopedia.com/terms/c/capitalizationweightedindex.asp
https://finance.yahoo.com/quote/NVDA/key-statistics/
https://www.barrons.com/articles/semiconductor-stocks-rally-take-profits-now-28e9edb6?mod=hp_LEDE_C_2_B_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/04-27-26-Barrons-Semiconductor-Stocks-Winning-Streak%20-%204.pdf
https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/04-27-26-Barrons-DJIA-S&P-Nasdaq%20-5.pdf
https://www.ebri.org/docs/default-source/rcs/2026-rcs/2026-rcs-release-report.pdf?sfvrsn=1229022f_1 (Page 4 and charts)
https://www.ebri.org/docs/default-source/rcs/2025-rcs/2025-rcs-release-report.pdf?sfvrsn=f5e3042f_5 (Page 4 and charts)
https://crr.bc.edu/the-impact-of-financial-advisors-since-the-uptick-in-policy-risk/
https://www.brainyquote.com/quotes/dwight_d_eisenhower_149111
ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
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