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Nearly halfway through 2025, it’s clear the stock market has a different character than in the past two years, in which it seemed the same story played out twice.
In 2023 and 2024, investors championed the rise of the “Magnificent Seven” tech stocks, leading to a historically low number of S&P 500 (^GSPC) constituents outperforming the broader index. This year, things are looking more normal relative to market history.
Through June 11, roughly 46% of companies in the benchmark index were sitting on year-to-date gains that topped the S&P 500’s 2.6% gain.
Richard Bernstein Advisors CEO Richard Bernstein said in an interview this week that all investors should hope the broadening continues, because it means “the health of the broader economy is improving.”
Across the S&P 500’s 11 sectors, seven have outperformed the index this year, led by a more than 9% rise for Industrials (XLI) and a 7% pop for Utilities (XLU).
The Magnificent Seven tech stocks have contributed significantly to the market’s most recent leg higher in the past month. But zoom out to the full year, and the cohort is a clear laggard.
Research from Exhibit A co-founder Matt Cerminaro notes that as of June 11, the Magnificent Seven index, which includes Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA), has fallen 2.51% in 2025. By comparison, the other 493 stocks in the S&P 500 have risen 5.32%.
As we highlighted late last month, the current market backdrop has grown more favorable for stock pickers, with stocks beginning to move on their own accord — rather than in a large group depending on the president’s Truth Social posts — as peak tariff uncertainty subsides.
AI remains a key theme for investors in that environment, but not all of this year’s biggest winners are tied to this transformative technology, another break from years past.
AI and defense darling Palantir (PLTR) is the year’s biggest winner in the index, rising 80%. But the balance of the top 10 best-performing stocks flaunts a more diverse group, featuring energy names like NRG Energy (NRG), gold plays like Newmont (NEM), and discount retailer Dollar General (DG).
And while companies like GE Vernova (GEV) and CVS (CVS) might not light up the conversation at a cocktail party, Bernstein notes that this broader participation is likely a good sign for markets moving forward.
