How you can take advantage of two stock-market trends

MarketWatch

by Philip van Doorn

February 20, 2026

AI-Generated Deep Dive Summary

The article discusses how the S&P 500 and similar indexes are weighted by market capitalization, leading large companies with strong performance to dominate these benchmarks. For instance, Nvidia, Apple, and Microsoft collectively account for nearly 19.4% of the State Street SPDR S&P 500 ETF Trust. This concentration highlights the significant influence of a few major tech firms on market indices. The article emphasizes that while large companies contribute significantly to index performance, this dominance can be a double-edged sword for investors. On one hand, these companies drive growth and stability; on the other, their overrepresentation can lead to higher risks if they underperform. This concentration underscores the importance of diversification in investment strategies. Investors are encouraged to consider opportunities beyond the largest tech giants, such as mid-sized or smaller companies that may offer greater potential for growth. By exploring sectors not heavily represented in major indices, investors can build more resilient portfolios that mitigate risk and capitalize on emerging trends. Understanding index weighting helps investors make informed decisions about diversification and portfolio management. It also underscores the importance of staying attuned to market dynamics and seeking opportunities in less

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Originally published on MarketWatch on 2/20/2026