The US Equity Market remains extremely concentrated… almost at the highest level in 100 years. Something big is coming. The VIX shows higher lows and is approaching a breakout.

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The U.S. equity market is nearing its highest concentration in a century, with the top 10 companies, heavily dominated by tech giants, accounting for a massive 29.4% of the total market. This historic level raises alarms, as market imbalances of this scale often precede significant economic shifts.

The Volatility Index (VIX), often a barometer for investor anxiety, is showing “higher lows” — a pattern typically signaling an impending spike in market volatility. Higher volatility generally suggests mounting uncertainty, which can trigger sharp market moves and reflect broader investor concerns.

In the broader economy, S&P Global’s September report reveals a mixed outlook. Service sector activity has increased, which is promising since services form a large part of the U.S. economy. However, manufacturing is lagging, shrinking at a slower rate but still showing ongoing challenges. Employment figures add to this dual picture: the service sector has seen modest job reductions, while manufacturing employment has sharply dropped, revealing deeper strain.

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The S&P Global composite output index, which combines both sectors, hit a two-month high, indicating a slight lift in overall economic activity. However, the job losses and manufacturing struggles suggest a fragile foundation. These underlying weaknesses mean that despite some resilience, the U.S. economy could face mounting pressure as the year continues.

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