The S&P 500 Just Had Its Best Quarter in Six Years — And the Average Stock Just Hit a New Record High. How to See If Your Portfolio Is Riding the Broadening or the AI Trade

The News at a Glance

Two charts are telling the same story this week. The headline index is rolling over as the AI mega-caps correct, but a parallel gauge that gives every S&P 500 name the same weight is sitting on a fresh all-time high. When those two lines diverge like this, the market is telling you that leadership is moving out of the top ten and into the other 490. The question for any investor with more than one brokerage account is whether the portfolio you actually hold is riding the broadening or still pinned to the same handful of names.

What the Banks Just Told You

Five of the biggest U.S. banks reported on Tuesday, July 14. The aggregate print is the cleanest signal we have so far for Q2 2026 earnings, because the banks sit at the top of the reporting calendar and their numbers tend to set the tone for everything that follows. The combined haul was about $49 billion, a record for the sector.

JPMorgan delivered $21.2 billion in net income on $7.70 in earnings per share, up 41% year over year. Stock trading revenue surged 86% to $6.03 billion. Investment banking fees climbed. The consumer bank kept growing deposits. Goldman Sachs, Bank of America, Wells Fargo, and Citigroup all beat records too. The New York Times called out the spread between record earnings and what it labeled as “tectonic” risks ahead, and the Wall Street Journal framed it as a red-hot quarter on Wall Street.

For a multi-brokerage investor the relevant detail is not the headline number. It is that five stocks you probably already own through an index fund — JPM, GS, BAC, WFC, C — just printed record results. If your bank exposure is sitting in an S&P 500 fund you are riding this. If your bank exposure is also sitting in a Schwab or Fidelity account in a different fund, you might be double-counting it. You cannot see either side of that trade from any single brokerage app.

The Two S&P 500s Are Saying Different Things

Most investors only ever look at the cap-weighted S&P 500, the one ticker that gets quoted on every news broadcast. That index weights every constituent by market cap, which means the ten largest companies account for about 41% of the whole thing. When those ten names are ripping, the index rips. When they correct, the index corrects.

The S&P 500 Equal Weight ETF (ticker RSP) tells a different story. It gives every one of the 500 names the same weight, so the influence of the mega-caps is removed. In May 2026, RSP hit a new all-time high. By mid-July it was still trading just below that record and was up roughly 11–12% year-to-date, comfortably ahead of the cap-weighted index over the same window. Schwab noted in its mid-July update that the cap-weighted Nasdaq-100 had fallen about 5% from its early-June peak while the S&P 500 Equal Weight Index was sitting just below an all-time high.

That divergence is the definition of a broadening rally. The gains are being shared across more names, not concentrated in the same handful. The economy underneath the market is doing the work, not just the AI capex story. Cyclical sectors, financials, industrials, small caps, and equal-weight value baskets have been doing the heavy lifting for most of 2026.

For a multi-brokerage investor the question becomes: when you look across every account you use — Fidelity, Schwab, Robinhood, your Roth IRA, your 401(k) — is your actual exposure riding the broadening or are you still pinned to the AI mega-caps through index funds that look diversified in isolation but stack the same ten names on top of each other?

The Trap With “Diversified” Index Funds

Walk through the typical retail portfolio. You might hold the SPDR S&P 500 ETF (SPY) in your taxable brokerage. You might hold the Vanguard Total Stock Market ETF (VTI) in your Roth IRA. You might hold a target-date fund in your 401(k). On paper, three different funds across three different accounts. In practice, the top ten holdings of all three are almost identical, and they overlap with the top ten holdings of your Nasdaq-100 fund and your growth ETF.

That is the concentration trap. None of your brokerage apps will surface it, because each one only sees the slice of your portfolio that lives on its platform. Your “diversified” S&P 500 fund in your Fidelity account looks diversified in the Fidelity app. So does your S&P 500 fund in your Schwab account. Neither app knows the other one exists.

If the AI mega-caps correct another 10% from here, every one of those overlapping positions takes the same hit at the same time. Your portfolio will feel more concentrated than the headline index, because the index itself is concentrated and you own multiple slices of it. The fix is not exotic — it is seeing the whole book in one place.

How to Read the Broadening Trade in One Sheet

A single Google Sheet is enough to read the trade. Pull every account you hold into one tab using InvestSheet (35+ brokerages supported, including Fidelity, Schwab, Robinhood, Vanguard, and E*TRADE). Add three columns on top of the standard holding data: ticker, position size as a percent of total net worth, and a one-word tag (mega-cap tech, bank, equal-weight, value, small cap, etc.).

Then build a pivot. Sum position size by tag. If mega-cap tech still makes up 35-40% of your net worth, you are riding the AI trade even if you think you are diversified. If banks, equal-weight ETFs, value funds, and small caps collectively outweigh the mega-cap tech exposure, you are riding the broadening. The math is not complicated. The hard part is getting every account into one place so the math is honest.

Two more columns make the analysis sharper. Add a “top-10 S&P 500 overlap” flag for any individual stock that appears in the top ten of your index funds, and an “ETF overlap” column that lists every other fund holding the same ticker. Once you see how often the same name shows up across accounts, the question of whether you are diversified stops being rhetorical.

What the Next Two Weeks Could Bring

Q2 2026 earnings season is just getting started. The banks set a high bar. Over the next two weeks the reporting calendar is heavy with the names that will determine whether the broadening rally has legs: Tesla, Alphabet, Microsoft, Meta, Apple, and Amazon on the AI side; consumer staples and energy on the broadening side. The calendar also includes Netflix, which already warned on guidance this week, and a long list of industrials and transports that tell you how the real economy is tracking.

The market is telling you right now that you do not have to choose. If the mega-cap tech earnings hold up, both the cap-weighted and the equal-weight indices can keep climbing. If the mega-caps disappoint, the equal-weight has room to keep doing the work. Either way, the portfolio question is the same: are you positioned to capture both, or have you stacked the same ten names across three different accounts and called it diversification?

The answer is one sheet away.

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