Small Caps Hit New Highs as S&P 500 Rally Masks Weak Breadth

The S&P 500 has surged ~7% since a bullish 'true gap' signal, outpacing the historical median four-week gain of 6%, yet weak breadth persists with only ~58% of components above their 200-day moving average and the equal-weight index failing to hit new highs. This follows initial warnings on May 1 of narrowing market breadth, where major ETFs like SPY (+0.66% to 723.37), VOO (+0.67% to 665.01), and IVV (+0.65% to 726.74) posted modest gains amid concentration in fewer stocks. By May 3, small caps stole the spotlight with the Russell 2000 reaching all-time highs and improving breadth, signaling potential leadership shift and rally fragility.