Rare! This year, the NASDAQ Composite Index outperformed the Dow Jones Industrial Average by more than 18%, the largest margin since 1991.

Gene Goldman, Chief Information Officer of Cetera Financial Group, said that the market is not very healthy at the moment.

Since the beginning of this year, the S&P 500 has risen more than 7%, the Nasdaq Composite has risen more than 18%, and the Dow has fallen 0.41%.

The Dow fell below its 50-day moving average for the first time since March 30. The 50-day moving average is a closely watched technical indicator.

The biggest outperformance in 32 years

Dow Jones Market Data shows that as of Tuesday's close, the Nasdaq is currently leading the Dow by 18.3% this year, the largest lead since 1991, while the Dow Jones Industrial Average has wiped out its gains for the year.

In the past 50 years, it has been extremely rare for the Nasdaq to outperform the Dow by such a large margin.

Dow Jones Market Data shows that this is the first time since the launch of the Nasdaq in 1971 that the year-to-date gain as of May 16 has exceeded 17%, while the Dow is still down for the year.

In the early 1990s, almost all of the current Nasdaq leaders either had not yet been established or were relatively small in terms of market capitalization, such as Apple, which went public in 1980.

At that time, the Nasdaq market was dominated by Costco and Cisco stocks.

Is the US stock market too concentrated?

Goldman Sachs said that investors have been buying large tech stocks such as Apple, Microsoft, and Nvidia, as well as stocks related to "FANG+." These stocks have contributed almost all of the market's gains in 2023, overshadowing weakness in other areas of the stock market.

Meanwhile, small-cap stocks, financial services stocks, energy stocks, and healthcare stocks have been falling since the beginning of the year. The Russell 2000 index, which measures small-cap stocks, has fallen 1.4% since the beginning of this year.

Goldman Sachs said that the top 10 components of the S&P 500 index in the first quarter contributed 87% of the index's gains, indicating how concentrated the US stock market has become.

Goldman Sachs attributed the reason for stimulating investors' interest in large tech stocks to the Fed's interest rate cut expectations, the decline in US bond yields, concerns about economic recession, and the "artificial intelligence boom."