Record S&P 500, but Few Stocks Are Doing the Lifting

True Contrarian Investments Chief Executive Steven Jon Kaplan is warning about the S&P 500 trading near record highs in early October 2026.

The S&P 500, a basket of 500 large U.S. stocks held in many retirement funds, climbed 0.66% to close at 7,773.95 points on Oct. 5, while the Nasdaq gained 1.05% to close at 27,477.31 points, according to Reuters reporting that day. Reuters Both benchmarks had reached record closing highs in early October. Reuters Wall Street then ended lower, off those highs. Reuters

Gains were narrow below the headline. As of Oct. 12, over 200 S&P 500 member stocks had declined in 2026. The technology sector accounted for over 10 percentage points of the S&P 500's 14% gain in 2026. Reuters In other words, tech drove most of the 14% rise. Analysts in early October expected 30.6% annual growth in S&P 500 company earnings, or profits. Reuters

Kaplan has been with True Contrarian Investments since August 1996. He has published a newsletter since 1996 and has been trading since 1981.

His most recent contrarian call came in December 2024, when he said a bear market, a long drop in prices, may have already begun and investors should brace for 2025. He argued at the time that the tech bubble had only grown larger. MarketWatch That warning is the authoritative version of his market view. Older statements provide context.

In March 2019, he told MarketWatch that "We are no longer in a bull market, we peaked last summer." MarketWatch In July 2019, he predicted energy shares could double or more by summer 2020. He had earlier said investors should consider taking a bullish position on the Swiss currency in May 2018. MarketWatch

The broader context here is concentration. The S&P 500 gives more weight to bigger companies, so a 14% gain with over 10 points from one sector and over 200 members down leaves the index resting on a few earnings results. For savers in index funds, high forecasts like 30.6% growth raise the bar for upside and widen the cost of disappointment.

In my view, Kaplan's consistency is the point. Bearish since at least 2019, focused on tech excess into 2025, and now cautious into a record print, he is leaning against rising prices rather than following them. The question is how to carry index exposure when returns are this uneven.