Broader S&P 500 Stocks Outperform Tech Giants in 2026
Retirement savers with 401(k)s may see a shift in portfolio performance as market concentration eases.
Updated on Oct. 21, 2026 in Investing
Live Poll
Is now a good time for you to diversify your retirement portfolio beyond big tech stocks?
Stocks outside of the largest technology firms are currently outperforming the market's heavy hitters in 2026. This shift in momentum affects portfolio diversification for retirement savers, such as those with 401(k) accounts.
Why it matters
The Magnificent Seven account for nearly 35% of the S&P 500, meaning concentration in these few stocks has historically driven index performance. As competition and infrastructure costs mount for Big Tech, the broader market is beginning to carry more of the growth load.
The Impressive 493 index has gained 14.1% year-to-date as of October 19, 2026, outpacing the 10.2% gain seen by the Magnificent Seven. Average 401(k) balances recently reached $155,800 in Q2 2026, reflecting the broader market's influence on retirement accounts.
The players
Ed Yardeni
An investment strategist and market analyst who provides projections for the S&P 500 index.
The details
The Magnificent Seven—comprising Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla—have faced pressure from high infrastructure spending costs. In contrast, other S&P 500 companies are successfully adopting artificial intelligence without the same level of massive capital investment. While analysts project 59% earnings growth for the tech giants in 2026, the remaining 493 companies are expected to see growth of 23%.
Timeline
2023: The Magnificent Seven stocks surged 76%.
2024: The Magnificent Seven stocks gained 48%.
December 2025: Ed Yardeni recommended underweighting the Magnificent Seven.
Q2 2026: Average 401(k) balances reached a record $155,800.
October 19, 2026: The Impressive 493 outperformed the Magnificent Seven.
Money Landscape
The current performance of the Impressive 493 marks a departure from the extreme concentration that defined the 2023 Magnificent Seven stock surge. This diversification within the S&P 500 is occurring as investors look beyond the highest-valued tech firms for growth.
Since the Magnificent Seven make up nearly 35% of the S&P 500, investors holding index funds should check if their retirement savings are over-concentrated in tech. Discuss your asset allocation and diversification strategy with a qualified financial professional.
The takeaway
Broader market gains are offering a different path for growth than the tech-heavy trends of the last two years. Review your 401(k) or brokerage statement to see how your fund holdings are weighted across the S&P 500 index.
Further reading
Learn more about building a balanced portfolio by visiting our Investing section.
Live Poll
Is now a good time for you to diversify your retirement portfolio beyond big tech stocks?
