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U.S. equities have maintained a steady recovery since the April 8th, 2025 trough, though the rebound masks considerable dispersion beneath the surface. While major benchmarks have posted strong year-to-date gains, index-level drawdowns and deep average member losses reflect uneven participation and lingering volatility. The data signals that large-cap resilience continues to overshadow smaller-cap and growth-heavy exposures, keeping market breadth fragile despite improving sentiment. S&P 500: Resilient but Narrow Leadership YTD: +16% | +37% off April low | -19% from YTD high | Avg. member: -27% The S&P 500 has delivered solid performance this year, climbing 16% YTD and 37% from April lows. Yet the index’s 19% peak drawdown and average member decline of 27% expose concentration risk—gains remain heavily powered by a small cluster of large-cap names rather than broad-based strength. NASDAQ: Strongest Rebound, Deepest Cracks YTD: +22% | +54% off April low | -24% from YTD high | Avg. member: -49% The NASDAQ, also known as US 100 CFD index, leads all major indexes in raw performance, up 22% this year and 54% from April lows. However, a 24% maximum drawdown and severe average member loss of 49% highlight fragility beneath its growth-driven surface, with many constituents yet to reclaim prior highs. Russell 2000: Small-Caps Lag Despite Rebound YTD: +10% | +39% off April low | -24% from YTD high | Avg. member: -40% The Russell 2000’s 39% rebound since April masks limited conviction in smaller-cap names. A 24% maximum drawdown and 40% average member decline illustrate that liquidity and earnings uncertainty continue to weigh on this segment, keeping it well behind larger peers. Dow Jones: Defensive Strength, Modest Returns YTD: +11% | +26% off April low | -16% from YTD high | Avg. member: -24% The Dow’s defensive makeup has cushioned volatility, producing an 11% gain year-to-date and a 26% rise from April lows. Its relatively shallow 16% drawdown signals stability, though broad participation remains muted as traditional sectors contend with slower earnings momentum. Smart money continue to prioritize quality and balance sheet strength, favoring large-cap leaders and diversified defensives while closely tracking market breadth indicators. Sustained leadership rotation and healthier participation across sectors will be key to confirming the durability of this rally into 2026. The Strongest Sector in All These Indices Information Technology Leads in 2025, But Momentum Shifts Demand Caution As of now, 2025, the Information Technology sector is leading as the strongest outperforming industry among the S&P 500, with a substantial +27.1% year-to-date return, outperforming the Communication Services sector (+26.8%) and the Utilities sector (+18.1%). It is worth noting that technology continues to be the driving force among market gains, sustaining market interest in themes like growth, innovation, and technology transformation, including artificial intelligence, cloud, and semiconductors. However, looking at the MTD trends, a small but crucial change in sentiment becomes apparent. The technology group is down by 1.7%, which represents one of the weakest MTD readings among the top sectors. On the other hand, so-called ‘defensive sectors,’ including Energy (+2.4%), Health Care (+2.1%), and Utilities (+0.5%), are relatively strong, implying a rotation out of growth into income and defensive sectors. Such a distinction emphasizes the growing rate sensitivity and a potential profit-taking move among the high-growth sectors. Smart money acknowledge the obvious leadership of technology so far this year, we continue to monitor for any signs that a sector rotation may be underway as markets anticipate a squeeze on market liquidity going forward. As we stand today, the technology sector continues to be the leading sector within 2025, although investors are advised to continue to closely watch market trends as leadership patterns often shift as volatility and macro pressures strengthen by end-year.
