The stock market continues to be extraordinary in the face of painful titles, but the risk of increasing concentration has more investors on the edge. The S&P 500 is back to peaks of all time while the case of Taurus on Wall Street takes place. The construction of artificial intelligence accelerates. Business benefits exceed expectations. Interest rate reductions seem inevitable, probably to come next month. In addition to all this, the only major bill will be stimulating for an economy where consumers are still spending. But the ascent of the market at a time of seasonal weakness and current inflation problems is worried about many investors. They fear that a scholarship at the price of perfection, the S&P 500 currently being traded at a multiple before 12 months of 22, is vulnerable to a sort of reverse. And it could come from anywhere. “What will happen, I think, is a shock that will happen. I do not know what shock, but a shock will happen, which undermines the thesis of continuous economic growth,” said David Kelly, global strategist for JPMorgan Asset Management. “And when this will happen, I think you will see a sale on the markets, and it will probably be concentrated in the areas that seem the most overvalued at the moment.” “So, I think investors should be quite cautious here, because what’s going on is that the market is slowly and more overvalued,” said Kelly. The heaviest market is more than anything, it is the heaviest nature on the market raises concern. Goldman Sachs underlined this week that the highest 20% of quality companies in S&P 500 – those with mass of massive cash flows and fortress balance sheets – are negotiated at a price of 57% premium to practice. However, the influence that technology giants exerts on the market are disturbing in the event of withdrawal. The AI Nvidia superstar now represents around 8% of the S&P 500, the largest weighting of any individual stock in the weighted benchmark in 1981, according to Torsten Slok, chief economist at Apollo Global Management. The stock is easily a key reason for the Haussier market, after joining over 36% this year, increasing more than 170% in 2024 and arrows by more than 200% in 2023. But, if the case of bull for beloved stock vacillate, which could express problems for the wider reference. China, for example, is a low key for stock, because any border on NVIDIA sales of its graphic processing units in Beijing will probably harm the stock – and also on the market. An incoming reversal? The most important actions seem particularly inflated when you consider this: although the S&P 500 has earned more than 10% in 2025, the median stock increased by only 3% and remains 12% reduction on its recent summit, according to a note by Goldman Sachs this week. Admittedly, this could set up the market for major rotations. Small capitalization actions outperformed their high capitalization counterparts this week. Factor value actions have also exceeded growth, while Nvidia has slipped and Apple has advanced. Health Care, a recent Lagcard, directed the S&P 500. If the Fed policy of Doviss’s perspectives for the Fed or the macroeconomic image improves, the rotation trade could continue to operate for investors. And yet, even optimistic investors continue to remain cautious and diversify their assets. Kelly de JPMorgan said he prefers assets with a limited drawback in the event of withdrawal. The strategist prefers that the United States appreciates growth actions and said it looked abroad to Europe, which it expects to work after its earnings this year. Some alternatives such as real estate could also add value to a portfolio, he said. Finally, Kelly expects a “violent” reaction – a 20% or more supported bear market – is late for the stock market, whether in a week or in the next three years. “It is simply imperative that investors diversify part of this risk in other industries and other regions in particular,” said Nanette Abuhoff Jacobson, world investment strategist at Hartford Funds. The reversal beneficiaries last week, Goldman Sachs identified lower quality actions with low balance sheets that could benefit from a reversal trade, if macroeconomic conditions improve or if the Fed becomes dominant. Here are five of them. Estee Lauder was an identified lower quality stock. The action is higher by more than 21% in 2025, but is in the middle of a multi -year recovery plan which could cost between 1.2 and 1.6 billion dollars. Paramount Skydance jumped 33% this week only, after it became a “Momentum lip game” after the finalization of the merger of Paramount Global with Skydance Media. – Sean Conlon of CNBC and Gabriel Cortes contributed to this story.
