S&P 500 rally shows strong momentum, but narrow breadth raises dot-com era warning

The S&P 500 rally has gained a bullish technical signal, but weak market breadth is raising comparisons to the late-1990s dot-com surge. The SPDR S&P 500 ETF Trust (SPY) closed above its upper Bollinger Band for the first time in more than a year, a rare weekly momentum event seen only seven times since the ETF’s 1993 launch. Astra Insights data show prior signals often produced choppy short-term trading but positive returns nine months and one year later in each historical case cited. The bullish setup suggests momentum may continue to support U.S. equities. The caution comes from breadth. Bespoke Investment Group data show the S&P 500 (^GSPC) has been setting records with fewer than 60% of stocks above both their 50-day and 200-day moving averages. The only similar period was December 1998 through March 2000, the final phase of the dot-com melt-up. Semiconductor momentum is also stretched, with the PHLX Semiconductor Index (^SOX) posting its strongest 29-session gain since March 2000.