The S&P 500 is sitting near record highs, but the market underneath is not as calm as the headline suggests. Analysts at The Kobeissi Letter describe a rare bull-bear market: the index looks strong while most of its parts are well below their best levels.
A Split Market
The firm says 84% of S&P 500 companies are at least 10% below their all-time highs. About 59% are down 20% or more, 41% are down more than 30%, and 17% are down more than 50%. That is a wide gap between the index and the average stock.
The cause is concentration. Since the March 30 bottom, only 10 companies have driven roughly 70% of the S&P 500 gain. Nvidia alone accounts for about 13%. Micron, Apple, Microsoft, AMD, and Alphabet are among the other big contributors. So the index looks healthy mostly because a handful of tech giants keep pulling it higher.
Macro Backdrop Changed
The split comes after a sharp shift in expectations. At the start of the year, markets expected at least three Fed rate cuts. Instead, the Fed hiked in September, and current expectations point to another three increases by June 2027. That is a 175-basis-point swing in the expected policy path. Meanwhile, Brent crude reached $106 per barrel, diesel is up more than 80% from January lows, and inflation remains almost twice the Fed target.
Kobeissi argues this may be an opportunity, not just a warning. Perhaps the key point is that if inflation, energy prices, and rate pressure ease, the broader index could find new buying pressure. A rally that spreads beyond mega caps would change the picture for many stocks that have been left behind.
What It Means for Bitcoin
Bitcoin was not the main focus, but the macro read matters. Persistent inflation and a weaker dollar can support scarce assets over time. Lower oil prices and a less restrictive Fed would likely help liquidity for risk assets, crypto included. I think the crypto link is indirect for now, but it is still worth watching.
For now, the S&P 500 paradox remains. The late October FOMC meeting is the next test. A hawkish surprise could add selling pressure to risk-on markets, while a softer tone might give the recent rally more room to broaden.
