Taking tabs on the strong first month of the year, at multiple points in the past day we highlighted (see here, here, and here) which areas were the best-performing parts of the market. In January, sectors like Tech, Communication Services, and Consumer Discretionary saw massive outperformance following the opposite playing out throughout 2022. Another significant point to these sectors is that they are home to some of the largest stocks in the S&P 500 by market cap; meaning those largest stocks have outsized impacts on the moves in the market cap-weighted S&P 500. As such, a massive portion of the S&P 500’s gains in January came from only a handful of names.

In the table below, we show the ten stocks which had the largest impacts on the S&P 500 index level moves. With double-digit percentage rallies during the month, the largest stocks in the index with market caps of more than $1 trillion like Apple (AAPL) and Amazon (AMZN) top the list. Those two alone accounted for over a fifth of the S&P’s gains in January. Impressively, adding in the rest of the top ten largest contributors (which account for roughly a third of the S&P 500’s total market cap) shows that those ten names combined had nearly the same impact as the hundreds of other stocks that make up the index.

Although mega caps, and thus a handful of sectors, have provided an outsized boost to the S&P 500 to start out the year, the market’s rally has still been broad-based as breadth has been quite positive. As shown below, the S&P 500’s cumulative advance-decline (A/D) line has been grinding higher and making new highs even as price has not been as strong. In other words, a large number of stocks are moving higher even if a small number of stocks are pulling more than their fair share of the load. 

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