[The Danger of Divergence in U.S. Stocks Intensifies: Median S&P 500 Component Down 15% from Peak, AI Giants Prop Up Index Appearance] BlockBeats News, October 17: As U.S. Treasury yields, the dollar, and oil prices rise, U.S. financial conditions have tightened significantly, leading to severe divergence in the stock market. A handful of large tech stocks are propping up index performance, while ordinary stocks remain under pressure. Morgan Stanley's Chief Equity Strategist Mike Wilson warns that the tightening of financial conditions is having an effect similar to Federal Reserve rate hikes, but the impact is primarily concentrated on ordinary stocks. Data shows that the median S&P 500 component has fallen approximately 15% from its 52-week high, marking one of the worst performances since the dot-com bubble burst. Over the past six months, the S&P 500 equal-weighted index has lagged the market-cap-weighted index by about 6%. Meanwhile, the S&P 500 equity risk premium has dropped below zero, indicating that the valuation attractiveness of stocks relative to U.S. Treasuries has further declined. Wilson points out that the current pressure mainly stems from valuation compression and has not yet clearly evolved into economic growth risks. Nominal GDP growth remains robust, and corporate earnings continue to grow. However, if real interest rates continue to rise, market valuations could face further pressure. Goldman Sachs has also warned that U.S. stock supply could increase significantly by 2027 due to the expiration of lock-up periods. Moving forward, whether financial stocks can stabilize and whether U.S. Treasury volatility subsides will become key indicators for determining the market's direction. The U.S. stock market currently faces two possibilities: either ordinary stocks rebound to catch up with large tech stocks, or large tech stocks decline, bringing the index in line with the broader market's weaker performance. [Original Link]