I don’t know how many times I need to say it — this market isn’t being driven by a handful of mega-cap Tech stocks (the big Technology names everyone talks about).
It never was. And it still isn’t.
In fact, the small-cap tech names have been leaving the mega-caps in the dust. Over the past three months, small-cap tech has massively outperformed its large-cap counterparts.
The “it’s just a few tech stocks” crowd keeps pushing this fantasy of weak market breadth — but if they actually bothered to count, they’d see what’s really happening.
Humans don’t like to count. They’d rather make up stories.
It’s Not Just Large-Cap Tech
Here’s the thing — it’s not just that large-cap Tech stocks are leading this market.
It’s Technology that’s leading this market.
See the difference?
Take a look at the returns over the past three months for the Small-Cap Tech Index (PSCT) and the Large-Cap Tech Index (XLK).
Both are crushing the QQQs, the S&P 500, and the Dow Industrials — and it’s not even close.
But here’s what most people miss: the real leader isn’t the Big Tech names. It’s the smaller ones — the little guys (+24.8%) are massively outperforming the bigger tech stocks (+14.8%):
Whenever I tell people that, they don’t believe me.
But that’s only because they haven’t bothered to actually look.
I do. I count. That’s why I know for sure.
Typical Bull Market Behavior
Go back and study every bull market over the past 100 years.
Seriously — go do it. That exercise will teach you more than anything I could possibly write here.
One thing you’ll find almost every single time: Technology leads. It’s the engine of pretty much every major bull market in history.
So why should this one be any different?
Here’s the Large-Cap Tech Index vs. the S&P 500 Large-caps — hitting new all-time highs.
And here’s the Small-Cap Tech Index vs. the S&P 600 Small-caps — also hitting new all-time highs:
It’s not just Mega-Cap Tech. It’s Tech, period.
And this rotation into Tech leadership isn’t even something that’s been running for years… Far from it.
Large-Cap Tech lagged after the summer of 2024. Small-Cap Tech was underperforming since mid-2023. It wasn’t until this spring that both turned higher — and now they’re breaking out together and hitting new all-time highs relative to their peers.
That’s sector rotation — the lifeblood of a healthy bull market.
So no, it’s not “just a few Mega-Cap stocks” propping things up. It’s broad participation across the entire Tech landscape.
And we’re only about six months into this rotation.
Go study every bull market in history — you’ll see this same playbook over and over again.
This is what a bull market looks like. You better get used to it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs