On Monday, November 3, 2025, investors woke up to a familiar sight: U.S. equity-index futures were on the rise, hinting that the remarkable seven-month rally in global stocks might still have momentum. Contracts for both the S&P 500 and the Nasdaq 100 crept up by 0.2% in premarket action, building on solid gains from the previous Friday. The mood, it seemed, was buoyant—driven by robust tech earnings and a subtle easing in U.S.–China trade tensions, according to reporting from Bloomberg.
Meanwhile, the optimism wasn’t confined to Wall Street. Asian shares posted a 0.3% gain, with South Korea’s market reaching a new peak. Yet, markets in China bucked the trend, registering declines on the same day. Investors in Japan, however, were on the sidelines, as both the Japanese stock market and cash trading of Treasuries were closed for a national holiday.
But beneath the surface of these upbeat numbers, a more complicated story is unfolding—a story about the growing dominance of a handful of tech giants and the implications for investors of all stripes. According to The Daily Upside, as of October 23, 2025, the 10 most valuable U.S. companies boasted a staggering collective market capitalization of nearly $24.4 trillion. To put that in perspective, these behemoths now make up just over 43% of the S&P 500 index.
It’s a concentration that’s hard to ignore. Nvidia alone, for instance, now represents nearly 8% of the S&P 500—matching the combined value of the entire 2,000 small-cap companies in the Russell 2000 index. The numbers tell a clear story: as of June 30, 2024, the top 10 companies accounted for 34.8% of the S&P 500. In just over 15 months, that figure has leapt by 8.2 percentage points. The big are getting bigger, and the rest are struggling to keep up.
Bryan Taylor, chief economist at financial data firm Finaeon, isn’t surprised. With over two centuries of financial data at his fingertips, Taylor notes that the stock market has simply never been this concentrated. "Based upon our analysis of the past 150 years, there seems no reason to believe that the increased concentration of the past 10 years is the harbinger of a major bear market. Increased concentration is the sign of a bull market, and bear markets reduce concentration," he explained to The Daily Upside.
The dominance of large-cap growth—especially tech—has left small-cap value stocks in the dust over the past decade. Not long ago, small-cap value was touted as the smart bet: greater return, less risk. But the tables have turned. These days, investors are crowding into large-cap growth funds or buying shares of heavyweights like Nvidia and Microsoft directly, while some have all but abandoned small-cap stocks. The rationale? Many of the most promising small-cap companies now prefer to stay private, sidestepping the costs and regulatory burdens of public markets. OpenAI is one high-profile example. This, some argue, leaves only the weaker small-cap players trading publicly.
For those unnerved by the sheer scale of this concentration, the instinct might be to run for the exits—sell off holdings and wait for the dust to settle. But the historical record offers little comfort to market timers. Goldman Sachs, as cited by The Daily Upside, found that "while investors usually think of elevated concentration as a sign of downside risk, the S&P 500 rallied more often than it declined during the 12 months following past episodes of peak concentration." In other words, betting against the giants has been a losing proposition, at least so far.
What about more nuanced strategies? Some investors have tried to sidestep the dominance of the top 10 by buying equal weight S&P 500 index funds—where each company, big or small, has the same influence. But that approach hasn’t paid off either. Over the one- and three-year periods ending October 22, 2025, the Invesco S&P 500 Equal Weight ETF (RSP) gained just 7.6% and 14.5%, respectively. By contrast, the cap-weighted Vanguard S&P 500 (VOO) notched 16.0% and 23.1% gains over the same periods.
The lesson, according to Taylor, is that trying to outsmart the market by underweighting the largest companies and overweighting the rest is a risky game. "I’ve never been in favor of tilting to any factor, such as small-cap, I’ve never believed in excluding them either," he noted. Instead, he advocates for broad diversification and disciplined asset allocation—owning a slice of everything, in proportion to its market value.
That means holding a cap-weighted total stock index fund, which owns more than 3,500 companies and reduces exposure to the top 10 from 43% to 35.4%. Diversifying globally, by including international stocks, brings that exposure down further to about 18%, spread across roughly 12,000 companies worldwide. This year, international markets have actually outpaced the U.S., largely because they’re less dominated by tech titans.
Of course, the specter of a market plunge is never far from investors’ minds. It’s unnerving to see so much value concentrated in so few hands. But as Taylor points out, "No one knows when markets will plunge, or what parts of the stock market will outperform." The best defense, he argues, is to "own the world at the lowest costs and rebalance with an allocation to high-quality fixed income." When the urge to make a dramatic shift strikes, he suggests, "let it pass and stick to your plan."
For now, the rally rolls on. The combination of strong tech earnings, resilient global demand, and a touch of geopolitical calm has kept markets climbing—even as some investors worry about how much higher they can go. The story of 2025 so far is one of remarkable concentration, but also of remarkable returns. Whether this bull market has more room to run, or whether a correction is lurking around the corner, remains anyone’s guess. But for investors watching the giants grow ever larger, the message from history is clear: diversify, stay disciplined, and resist the temptation to predict the unpredictable.
As markets continue to evolve, the challenge for investors will be to balance the lure of the winners with the wisdom of spreading risk. The past may not predict the future, but it offers a few hard-won lessons—chief among them, that humility and patience often pay off best in the long run.
