Investing Ideas

Navigating a concentrated equity market in 2026

A small number of high-performing stocks have continued to drive the market’s return. Why that alone is not a reason for trepidation.

By: Denise Chisholm Roy Justice Nidhi Gupta

Updated: 1/16/2026

Key Takeaways

The U.S. equity market has become concentrated, with a handful of stocks driving a larger percentage of the market’s gain than at any time since the 1970s.
Although the last two periods of high market concentration ended in a recession and a burst valuation bubble, high concentration alone has not been a worrisome issue for investors.
Valuations matter, and the forward price-earnings ratios of stocks in the information technology sector are historically high, but significantly lower than they were before the technology stock bubble burst in the early 2000s.
Higher market concentration may also be an opportunity for active stock selection due to a higher variance of earnings surprises.

Get the full white paper

Navigating a concentrated equity market in 2026

Next steps to consider

Custom Investment Solutions

Discover how our investment solutions can be tailored to meet your unique goals and objectives.

Learn more

Asset Class Overview

Explore strategies and custom solutions across asset classes, designed to help you face your most complex challenges head on.

Learn more

Alternative Investments

Discover a wider range of new investment opportunities with our growing lineup of alternative investments.

Learn more

For important information, see the full linked content.

1153073.3.0

3FD5273CA5614A3BB6729E3F57501799

Past performance is no guarantee of future results.

Unless otherwise expressly disclosed to you in writing, the information provided in this material is for educational purposes only. Any viewpoints expressed by Fidelity are not intended to be used as a primary basis for your investment decisions and are based on facts and circumstances at the point in time they are made and are not particular to you. Accordingly, nothing in this material constitutes impartial investment advice or advice in a fiduciary capacity, as defined or under the Employee Retirement Income Security Act of 1974 or the Internal Revenue Code of 1986, both as amended. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in the products or services and may receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services. Before making any investment decisions, you should take into account all of the particular facts and circumstances of your or your client's individual situation and reach out to an investment professional, if applicable.

Registered investment products (including mutual funds and ETFs) and collective investment trusts managed by Fidelity Management Trust Company (FMTC) are offered by Fidelity Distributors Company LLC (FDC LLC), a registered broker-dealer. Investment advisory products and services are provided by FIAM LLC, or Fidelity Diversifying Solutions LLC (FDS), both U.S. registered investment advisers. FDS is also a CFTC registered commodity pool operator and registered commodity trading adviser. Products and services may be presented by FDC LLC, a non-exclusive financial intermediary affiliated with FIAM and FDS and compensated for such services.

Before investing have your client consider the funds', variable investment products', exchange-traded products', or 529 Plans' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or a summary prospectus, if available, or offering statement containing this information. Have your client read it carefully.

The use of the term "advisor(s)" throughout this site shall refer to both investment advisors and broker dealers as a collective term.