AI Strength Hides S&P 500’s Weakest Breadth Since Dot-Com Era

Goldman Sachs said AI stocks have helped keep the S&P 500 steady, even as market breadth fell to its lowest level since the dot-com bubble. Strategist Ben Snider said the median S&P 500 stock trades 16% below its 52-week high.

Goldman’s sentiment indicator, which tracks how heavily U.S. equity investors are positioned in stocks, fell to -0.9. Snider said that matched the indicator’s March lows.

Snider wrote that the combination points to potential for broad market gains and a “catch-up” by recent laggards if macro uncertainty declines. The view comes as index performance has held up while the median stock sits below its yearly high.

The S&P 500 has returned 14% so far this year. Its forward P/E ratio has fallen from 22 times to 19 times, in line with its 10-year average.