What a week.

Monday opened strong and sold off. Tuesday gapped down. Wednesday recovered. Thursday gapped down again. Friday opened lower but finished flat. In the end, the S&P closed the week down about 1.6%.

But the index is hiding what’s happening underneath.

The S&P 500 is down at the lows 4% and 6% for the Nasdaq 100.

Earlier this year, roughly two-thirds of the index was positive year-to-date. Now, even with the index still close to its highs, only about half of the stocks are still up YTD. A smaller group of names is doing most of the work.

This isn’t new. In October, the major indices hit new highs while a large share of individual stocks did not. About 40% of the Nasdaq 100, 42% of the S&P 500, and more than half of the Russell 2000 were negative for the year at that point. The market has been getting narrower for months.

You can see it in the decline from recent highs. More than 150 stocks in the S&P 500 are down at least 20% from their 52-week highs. That is nearly double what we saw last year. Leadership is concentrated in only a handful of names.

The market has been carried by just a few giants. The Mag 7 now make up more than 35% of the entire index. But this is not the same as the market being held up by one narrow theme or one risky bet. These companies run huge, diverse businesses. They touch cloud, AI, chips, hardware, software, and massive consumer platforms. They are some of the strongest and most durable companies in the world.

We’ve seen this before. When cars became popular, General Motors became the biggest company and stayed on top for years. When computers took off, IBM did the same.

If AI is a real, lasting shift, then companies like Nvidia will stay on top for a long time. The demand for AI chips and infrastructure is only just getting started. If this trend continues even halfway as expected, they remain the center of the new economy.

But when the market depends too much on just a few big stocks, the whole market becomes fragile. Those big names are basically holding everything up. So if they start to fall, the rest of the market usually follows. The Mag 7 just had their weakest week since April, falling more than 3%.

High beta and unprofitable tech stocks were hit even harder than the broad market. These are the names that tend to move the most when sentiment shifts, and this time was no different. Volatility in this group has jumped back to levels we last saw during the tariff shock years, because investors always pull back from the highest-risk areas first.

For many of these stocks, the declines have been sharp. It’s not unusual to see individual names down 15%, 20%, or even 30% in a matter of weeks or even days.

Bitcoin has been weak. It fell below its 200-day moving average and is now more than 20% below its recent peak. Bitcoin often moves first when investors become more or less willing to take risk, so this drop suggests risk appetite has cooled.

A big part of the decline came from…