Market breadth for the S&P 500 index weakened significantly throughout September. On September 8, only 42.34% of the index components traded above their 50-day moving average, marking a five-month low compared to summer levels exceeding 60%.
By September 18, the share of stocks trading above the 50-day moving average dropped to 31.4%. Simultaneously, the percentage of stocks above the 200-day moving average fell to 43.2%, down from peaks near 70% recorded just weeks earlier.
Internal data from September 15 shows that 38.5% of S&P 500 stocks traded below both their 50-day and 200-day moving averages. Only 32.3% of the index components remained above both of these key technical lines.
Analysts at Piper Sandler noted that the combination of declining market breadth and weakening momentum warrants caution. Because the S&P 500 is market-cap weighted, major technology firms currently exert disproportionate influence on the index's overall performance.
