The major indices were jumbled on Wednesday after a few days with nice upside price action to start the year. Meanwhile, the so-called breakout to all-time highs for the S&P 500 Index (^SPX) – as framed by the media and even some technicians – didn’t hold, notes John Eade, president of Argus Research.
Market breadth turned in a poor performance following three fairly strong days, while the majority of S&P 500 sectors were smacked. Once again, the dispersion of returns from individual stocks was very wide, and information technology leadership saw a noticeable change to the underperforming cybersecurity stocks.
S&P 500 Index (^SPX)
Data by YCharts
Stocks like CrowdStrike Holdings Inc. (CRWD) and Datadog Inc. (DDOG) have been punished in recent months. The one consistency in 2026 has been the strength in biotech, with more big gains from names like Regeneron Pharmaceuticals Inc. (REGN) and Illumina Inc. (ILMN).
If you want to look for a potential bubble, perhaps look no further than the smaller biotech stocks. On Wednesday, there were three biotechs up more than 40%, two up over 30%, four up over 20%, and eight up over 15%.
A couple of these stocks are tiny. But the others have market caps that start at $100 million and go up into the billions. There were also nine small pharmaceutical stocks up between 15% and 60%.
As for the S&P, the assault on the next big round number of 7,000 was rejected. For us, the alleged all-time high didn’t come close to meeting the standard technical requirements.
Speaking of big, psychological numbers, the Dow Industrials hit 49,621 near the opening but then sold off. For now, the “Dow 50,000” hats should stay in the box.
