Nvidia and Micron Drive Record Market Concentration

Schwab's chief investment strategist Liz Ann Sonders points to a disturbing trend in the market. Concentrated growth is happening mainly through two companies, Nvidia (NVDA) and Micron (MU), which together account for nearly a third of the S&P 500's expected earnings growth by 2026.

Nvidia alone accounts for 18% of this growth, while Micron contributes another 14 percentage points. This concentration is causing a rotation in the market, with investors moving into crowded winners and away from less popular positions.

Sonders referred to this phenomenon as 'rotation in and of itself [being] the new momentum trade.'

This trend has been observed alongside Bitcoin's (BTC) recent surge past $80,000. This rally came amidst bond market stress and dollar weakness, which some analysts attribute to fading confidence in the US Treasury.