Market concentration on the US stock exchange remains above long-term averages despite a decline in technology stocks in the first quarter of 2026. According to Reuters, five companies – Nvidia, Apple, Microsoft, Amazon, and Alphabet – together accounted for about 23 percent of the Morningstar US Market Index. This concentration is significantly higher than five years ago when the five largest stocks made up only 16 percent of the index.
Analysts had hoped that the market would diversify after a difficult start to the year. However, the same technology companies that weighed down the indices in the first quarter contributed to the recovery in April. The US market index fell by 4.2 percent in the first quarter, with about 70 percent of this decline attributed to the technology sector.
In April, however, the technology sector experienced a 15 percent increase, while the energy sector fell by 10 percent. This development shows that technology continues to play a crucial role in market performance. So far in 2026, the technology sector has contributed 1.6 percentage points to the overall market gain.
The dominance of technology stocks is part of a larger trend, indicating that this sector accounts for more than half of market gains in positive quarters and more than half of losses in negative quarters. This trend underscores the ongoing influence of technology on the overall market performance.
