Year-to-Date Performance of the S&P Composite 1500

The stock market is running hot so far in 2026.  The S&P Composite 1500, a broad measure of the stock market, was up 10.9% year-to-date as of Friday, May 29.  Among its components, the large cap S&P 500 was up 10.7%; the S&P MidCap 400 was up 12.7%; and the S&P SmallCap 600 was up 14.8%.

The contributions of the three component indices to the total year-to-date price return of the S&P Composite 1500 are calculated using their respective individual price returns multiplied by their market capitalization weightings.  For these calculations, the market capitalization rates were taken at December 31, 2025.  The weightings were 92.5% for the S&P 500, 5.1% for the MidCap 400 and 2.4% for the S&P SmallCap 600.

Based upon those returns and market weights, the S&P 500 contributed 9.92 percentage points (PP) of the Composite 1500’s 10.93% year-to-date return; while the S&P Mid-Cap 500 and S&P Small Cap 600 contributed 0.65 PP and 0.36 PP, respectively.

The Composite 1500 began the year trading sideways.  It then dropped 7.9% in March after the bombing of Iran.  On March 31, it reversed course suddenly and has been in an uptrend ever since, surging 19.0% from the beginning of April to the end of May to close at an all-time high of 1702.96.

The S&P Mid-Cap 400 and Small-Cap 600 have outperformed the market so far this year.  Both indices rallied during the first three months of 2026, while the S&P 500 and Composite 1500 traded sideways.  The weak relative performance of large caps from January to March was due mostly to softness in the Mag 7.

Large cap stocks started to slide a couple of weeks before the bombing of Iran on February 28, while prices of mid-caps and small caps held up until then.  After the bombing, all of the component indices began to slide.  The selling continued until the end of March when they all reversed course, moving sharply higher.  The rally was broad-based in April and narrowed considerably in May.  Large cap stocks have outperformed mid-caps and small caps.  In recent weeks, technology stocks have been the primary driver of market gains.

Twenty megacap stocks that I track, including the Mag 7, pulled the stock market out of its tailspin in April and have continued to outperform although their relative performance gap has narrowed.  In April, those 20 megacaps posted a combined average, market-weighted return of 13.5%.  With their 44.2% weighting within the Composite 1500’s market capitalization, they accounted for 6 PP or 58.2% of the Composite 1500’s total price return of 10.3%.  In May, the megacaps’ average, market-weighted price return slowed to 5.3% and they accounted for 2.4 PP or about half of the Composite 1500’s total price return of 4.9%.

The S&P 500 posted a price return of 10.4% in April and accounted for 9.6 PP of the Composite 1500’s total price return of 10.3%.  The Mid-Cap 400 delivered a 7.8% total price return, while the SmallCap 600 gained 10.3%.  Together, the 400 and 600 accounted for 0.7 PP of the Composite 1500’s 10.3% price return.  The Mag 7 posted an average, market-weighted return of 17.2% in April and accounted for 4.8 PP or 47.1% of the Composite 1500’s 10.3% gain. 

The Composite 1500’s performance moderated to a still quite strong 4.9% in May.  Among its components, the S&P 500 gained 5.2%. the Mid-Cap 400 2.3% and the SmallCap 600 0.9%.  Thus, with its 92.2% market cap weight, the S&P 500 accounted for substantially all – 97.1% – of the Composite 1500’s 4.9% price return.  The Mid-Cap 400 and SmallCap 600 together represented just 0.14 PP of the 1500’s price return in May.

Nine of eleven industry sectors posted gains in April.  The sectors with the highest price gains were Communication Services, Information Technology and Consumer Discretionary.  Those are the sectors that house the Mag 7.  (Alphabet and Meta in Communication Services; Apple, Microsoft and NVIDIA in Information Technology; and Amazon and Tesla in Consumer Discretionary).  The only two sectors posting losses in April were Health Care (-0.3%) and Energy (-2.7%).  Energy pulled back modestly in April after posting cumulative gains of 37.4% in the first three months of the year.

The Mag 7 accounted for 2.1 PP or 42.5% of the Composite 1500’s 4.9% price return in May.  However, eight of eleven industry sectors posted losses in May.  The only three sectors to post gains were Technology (up 15.9%), Healthcare (up 2.5%) and Consumer Discretionary (up 2.3%).  Technology, both with and without the megacaps, accounted for more than 100% of the Composite 1500’s advance in May.

The Information Technology sector remained red hot in May, posting a price return of 15.9%, while most of the remaining sectors experienced slight to moderate losses.  Besides Info Tech, the only two sectors posting gains were Health Care (up 2.5%) and Consumer Discretionary (up 2.3%).  The Energy sectors loss widened to 6.3% in May, as expectations of an imminent rapprochement with Iran rose.  Even with those back-to-back losses, the Energy sector’s price return is 25.2% year-to-date.

Both on the way down and especially during this latest rally, the tech sector, including the Mag 7, has led the way.  The Composite 1500 Information Technology sector had posted modest declines in January, February and March (with cumulative losses of 8.7%).  It was the worst performing sector in January with a 1.5% decline.  Its losses widened in February to 3.6%, but other sectors, including Financials, Consumer Discretionary and Communication Services lost more.  In March, its percentage decline decreased slightly to 3.7%, but it was the second best performing sector, behind Energy’s 10.2% gain.  (Energy was the only sector to post a positive return in March.)

From there, the Information Technology sector rallied sharply, posting returns of 17.6% in April and 15.9% in May.  Two other sectors, Consumer Discretionary and Communication Services, also posted double-digit gains in April, due to the strong performances of Amazon (up 27.3%) and Alphabet (up 33.8%) which dominate their sectors’ performance due to their huge market capitalizations.  (Tesla, a Mag 7 stock that is also a component of Consumer Discretionary, was up a comparatively modest 2.7% in April, while Meta Systems, a component of Communication Services was up 7.0%.)

The April rally in technology was not limited to Mag 7 components Apple, Microsoft and NVIDIA.  Those three stocks posted exceptional monthly gains of 6.9%, 10.2% and 14.4% respectively that month; but Technology stocks across all market caps also performed amazingly well, as evidenced by the 16.8% gain in the Mid-Cap 400 Technology Sector index and the 23.8% spike in the SmallCap 600 Technology sector index.  In fact, the Composite 1500 Information Technology sector, excluding its megacap components posted an average, market-weighted price return of 24.7%.  The rally in technology stocks continued at the same feverish pace in May, with the same non-Mag 7 technology stocks delivering a 24.2% return.  Year-to-date through May, technology stocks, excluding the Mag 7, are up 51.1%.

Clearly, with this latest rally, technology stock valuations have become even more stretched.  At a minimum, this suggests that a correction may not be far off.  That correction may be precipitated by the upcoming IPOs for SpaceX and Anthropic (with Open AI probably not far behind), as investors sell some of their existing positions to make room for these new ones.  SpaceX alone is expected to raise $75 billion, which would be the largest IPO in history.

(Note:  The 20 megacap stocks in this analysis are AAPL, MSFT, GOOGL, AMZN, NVDA, META, TSLA, LLY, UNH, WMT, V, XOM, JPM, AVGO, PG, JNJ, MA, BRK.A, ORCL and HD.)

June 3, 2026

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com

© 2015-2026 by Stephen P. Percoco, Lark Research.   All rights reserved.

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