The rise of the US S&P 500 index masks a growing divergence in the performance of the companies listed within it. A limited group of giant companies—connected to varying degrees to the AI investment cycle —is driving the US stock market and influencing its trends. How so?
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The S&P 500 index tracks the performance of the 500 largest U.S. companies listed on U.S. stock exchanges (such as the New York Stock Exchange and Nasdaq), and includes companies from various economic sectors. It is a mirror reflecting the state of the U.S. economy and market.
On the other hand, that more than two-thirds of the companies in the Russell 1000 index are linked to artificial intelligence, either directly or through its integration into their business models, at a time when major technology companies and beneficiaries of spending on artificial intelligence constitute about 16% of the US high-rated bond market.
How do 7 giant companies control 500 other companies?
The paradox is that the S&P 500 index can remain high even when a large number of stocks within it decline, because of the way it is constructed, as the weights of companies are determined according to their market value and not equally.
Academic and economic researcher Mahmoud Mufid Abdel Karim told Al Jazeera Net that the index may appear strong "while the market remains much weaker than the numbers suggest," noting that the gains of a limited number of giant companies can cover the decline of hundreds of lesser-weighted stocks.
According to Abdul Karim, the weight of the "Big Seven" reached approximately 34% of the index in late September 2026, while the top 10 companies accounted for about 38%, which means that the movements of a limited number of stocks have become able to influence the index in a way that is disproportionate to the number of companies listed in it.
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technology