JP Morgan Guide to Markets Oct2026
(This is for information purposes only. This should not be construed as a recommendation or investment advice even though the author is a CFA Charterholder. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)
JP Morgan Asset Management publishes a comprehensive presentation every month end, containing various slides on global markets, especially those relating to the US markets.
This is a very useful and informative guide for financial market professionals or FMPs. This "JP Morgan Guide to the Markets" can be accessed here. The following are some of the highlights / images presented in this guide: all the data are at the end of 30Sep2026:
Chart 1 showing PE of top 10 and remaining stocks is S&P 500, also shows the weight of top 10 companies in S&P 500 and their share of earnings (past 12 months) >
Market cap weight of Top 10 stocks in S&P 500:
40.6% Sep2026
35.8% Sep2024
18% 2015
21% 2005
27% 2000 (Dotcom Bubble)
18% 1995
21% 1985
Market cap weight of Top 10 stocks in S&P 500 dropped significantly from 40.6% in Sep2026 to 38.9% in Oct2026.
The early trends of Nov2026 clearly indicate this is likely to fall further (hint: Nasdaq Composite fell 5.5% on 05Nov2026, due to fears of AI investments slowing down after the Democratic Party won both Houses of Congress in 03Nov2026 mid term elections in the US).
The nearly historically high concentration of 38.9% market cap weight of top 10 stocks in S&P 500 needs some context.
In addition to their historically elevated share of S&P 500 market cap, the top 10 stocks accounted for 36.6% of the index’s trailing 12-month earnings as of Oct2026, a level near its historical peak.
Market concentration risk is very high for S&P 500 index. Passive investors need to be aware of this phenomenal change in the structure of the index.
Chart 2 showing Performance of Mag 7 stocks vs S&P 493 >
Mag 7 or Magnificent 7 stocks are:
Alphabet
Amazon
Apple
Meta (Facebook)
Microsoft
Nvidia
Mag 7 stocks have significantly outperformed the S&P 493 and S&P 500, driven by strong technology-led returns.
Mag 7 earnings growth remains substantially stronger, forecast at 55% in 2026 versus 25% for the S&P 493.
Look at the chart for Mag 7 outperformance for 2021, 2023 and 2024.
Broad-based recovery: Economic growth benefits most sectors and income groups, with gains spread across businesses, employment and consumers.
K-shaped recovery: Different segments move in opposite directions—technology and asset owners prosper, while lower-income households and vulnerable sectors lag.
While years 2022, 2023, 2024 and 2025 show that it is mostly K-shaped recovery in the US economy, driven mainly by Mag 7 stocks.
But 2021 is kind of benchmark for broad based recovery, with both S&P 493 and Mag 7 doing very well (post-COVID 19 recovery), though Mag 7 outperformed the rest.
2021 context: Reopening, stimulus and pent-up demand drove a broad-based corporate earnings rebound, benefiting the S&P 493 alongside Big Tech.
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