Mr. Market…Is That Really You?

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Mr. Market…Is That Really You?

3/23/2026

How the US stock market has changed, and one possible response.

Robert Bush

DWS Research Institute

Financial stock market numbers and city light reflections

Sometimes, it is hard to spot change. Particularly when it occurs incrementally, over several years, and in something you think you know intimately. But, in our view, the simple truth is this – the US stock market today is an entirely different beast to what it was just a decade or two ago.

Figure One shows one aspect of this change, and confirms an intuition that many investors likely already have. It shows the market capitalization of the ten biggest companies in the S&P 1500 over the last thirty years or so. Crucially, note the move in that concentration over the last decade - it has gone from a plateau of somewhere between 15-25% to more than 35% at the end of 2024.

Figure One: The Market Cap of the Ten Largest Companies in the S&P 1500

^{Source: FactSet, as of 11/2025}

To be clear, we’re not saying that this level of concentration is unsustainable, but, it should at least be food for thought that, in the last thirty years, we have not seen a more dominant cohort of companies. And, in addition to their dominance, note that four of the top five largest companies are all in the same sector, Information Technology (IT). It’s a point that David Bianco, our Head of Active Equities in the US, and CIO for the Americas, has made several times - the US stock market appears increasingly tilted towards technology and growth characteristics.

For investors who aren’t concerned by this, and see it merely as the inarguable outcome of a market driven economy, then it’s business as usual. But, in our view, it’s worth at least thinking about these developments, and, for those that aren’t entirely comfortable, the good news is that there are several options to help diversify away from this exposure, including – across different underlying holdings, across different geographies, across different style tilts, across different asset classes, and, as we examine more deeply in a white paper on this topic, across different market capitalizations. Perhaps it’s time to welcome small and mid-cap companies back into the fold.

Mr. Market…Is That Really You?

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