The second half of the year may see better performance from a wider range of U.S. equities according to investors who have observed this trend for months.
The S&P 500 has received most of its gains since President Donald Trump’s April 2 tariff shock from the “Magnificent Seven” tech names which include Apple, Microsoft and Nvidia and represent more than 40% of total returns. The Magnificent Seven ETF has increased by more than 30% since reaching its lowest point in April.
Some investors believe the current market conditions favor a wider market expansion because industrials and consumer staples and utilities and financials sectors lead the S&P 500 this year. The earnings growth of the rest of the market will compete effectively to support general market gains according to Michael Reynolds who serves as vice president of investment strategy at Glenmede.
The equal-weight versions of the S&P 500 index have matched the main index performance during 2025 despite large-cap tech dominating the index during the previous two years.
The market has shown increased optimism due to strong first-quarter earnings results following initial concerns about AI competition and Trump’s extensive tariff implementation.
The Magnificent Seven maintain their absolute return leadership but analysts believe widespread market participation will determine the rally’s sustainability.
