The ‘Stealth’ Bear Market Is Getting Worse: 60% of S&P 500 Stocks Are Now Down 20%+
The S&P 500 remains near record highs while over 60% of its components have entered bear market territory, with tech and crypto-linked stocks suffering the most severe losses.
The S&P 500's proximity to its all-time high creates a misleading picture of market health. According to data from the Kobeissi Letter, more than 60% of companies in the benchmark index have fallen at least 20% from their respective record highs, officially placing them in bear market territory. This divergence has accelerated significantly in recent weeks.
Even some of the largest technology companies are no longer immune to this downturn. Four of the so-called Magnificent Seven tech stocks have dropped by 15% or more from their peaks, with the group collectively erasing approximately $4 trillion in market capitalization since their highs. This exceeds the entire cryptocurrency market's capitalization.
Tech Stocks Suffer Most
Technology-related companies are experiencing particularly severe declines. AppLovin has plummeted by 68% from its all-time high, followed by CoreWeave at -60%, Western Digital at -54%, and Oracle at -51%. Other notable tech stocks showing significant losses include Arm Holdings (-49%), Meta (-21%), and Alphabet (-31%), which has fallen from $400 to around $282.
The concentration that previously kept the S&P 500 near its highs is weakening as losses spread into some of the very companies that had supported it.
Crypto-Linked Stocks Follow
Crypto-related equities are among the worst performers in this market downturn. Coinbase has tanked by 62% from its peak, while Circle has fallen by 48%. Robinhood, which has increased its exposure to crypto-related services, has dived by 44% from its highs. The Nasdaq 100 index has now lost nearly $5 trillion since October 6th.
Despite these widespread losses, the Kobeissi Letter views the current market divergence as a potential opportunity rather than necessarily signaling the beginning of a prolonged market collapse. The unusual market conditions make it increasingly difficult to describe the current environment as a conventional bull market.
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