Invesco's QQQ was on track for a weekly gain as its top 10 holdings made up almost half the fund. The equal-weight version of the S&P 500 was down 0.6% for the week.
Look only at the headline indexes and this has been a manageable week for stocks, with the 10-year Treasury yield at its highest level since 2007. Look at the average stock and it has not.
The Invesco QQQ Trust, which tracks the Nasdaq 100 and is dominated by the largest technology companies, slipped about 0.2% in afternoon trading Thursday. Even so, it was headed for a gain of about 2.5% for the week, better than the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite have managed so far. Its 10 biggest positions, a group that includes the megacap technology companies and several chipmakers, account for almost 47% of the fund.
The Invesco S&P 500 Equal Weight ETF tells a different story. It gives every company in the index the same weight, so it reflects the typical stock rather than the biggest ones. It was down 0.6% for the week as of Thursday morning. That leaves a gap of about 3.1 percentage points in a single week between the fund built around the biggest companies and the one that treats every company alike.
On Thursday the split played out inside a flat tape. By the afternoon the S&P 500 sat near 7,710 with little net change, the Nasdaq Composite was about even, and the Dow had lost about 150 points. Earlier, tech had been the worst of the index's 11 sectors, off 1.2%, with a semiconductor gauge down 1.9%, before both clawed back most of the loss. Energy, up 1.3% with Brent near $105 a barrel, led the way.
Oracle, down about 5% after serving a force majeure notice on the developer of its New Mexico data center campus, was among the index's weakest names. Indexes pared their early losses as word emerged of U.S. and Iranian talks on a phased plan for Hormuz shipping.
The concentration cuts both ways. Invesco's QQQ strategist, Paul Schroeder, credits artificial intelligence for the fund's run and names rising rates as the pressure on what it owns. A market carried by a small group of AI-linked leaders can keep headline indexes afloat while most companies lose ground. It also means a single setback at one of those leaders moves the whole index.
Friday's close will set the weekly scorecard. If the equal-weight fund finishes the week lower while QQQ holds its gain, it would mark another week in which higher yields have fallen hardest on the companies without AI earnings to offset them. A narrowing of that gap would suggest the pressure from bonds has started to reach the leaders too.