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Is the "Big Seven"'s Contribution to the US Stock Market Rally Nearing Its Peak? Investors are gearing up for the busiest week of US earnings season, with four of the tech giants set to report. Meanwhile, the debate is reigniting about the impact of these large companies on US stock indices and whether we're seeing the market truly expand. By some measures, the profits, market capitalization, and valuations of this small group of tech giants have never been so dominant in the overall market. While the broader market index has repeatedly reached new highs, excluding these companies presents a far less rosy picture. Indeed, since the beginning of 2023, the S&P 500 Composite Index (a "market capitalization" indicator, where the "Big Seven" have become increasingly dominant) has risen 67%, more than double the 32% gain of the S&P 500 "equal weight" index. Just two years ago, the S&P 500 Composite/Equal Weight ratio was 0.66, meaning the former was worth about two-thirds the latter. Now, the ratio is 0.84, the highest since 2003, and for good reason. Larry Adam, chief investment officer of Raymond James, reported that 12-month earnings expectations for the S&P 500 Composite Index are 14% higher than those for the equal-weighted index. Tajinder Dhillon, senior research analyst at London Stock Exchange Group (LSEG), noted that the "Big Seven" companies accounted for 52% of overall earnings growth last year. Many investors and analysts believe it's unhealthy to pin the entire market's fate on a handful of companies. This might be fine when these companies are soaring, but it's not so great if one or two of them tank. It also complicates stock picking. If the market is essentially following the "Big Seven" or Nvidia, why would investors buy other stocks? This is where market inefficiency comes in. Recently, there have been initial signs that market attention may be expanding beyond technology and artificial intelligence (AI)-related stocks, largely due to positive trade news. Last week, the equal-weighted index broke through its November high, setting a new record. Can it achieve this? Approximately 160 S&P 500 companies will report earnings this week, including Meta and Microsoft on Wednesday and Amazon and Apple on Thursday. It is no exaggeration to say that the impact of these four financial reports on the market will exceed the sum of all other financial reports.