More stocks are beating the S&P 500 than in years: what it means

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For much of the past few years, the S&P 500's performance was heavily concentrated in a handful of large companies, especially those tied to technology. Now, the number of stocks outperforming the index as a whole is at its highest level in four years, a sign pointing to a shift in how the market is moving.

This phenomenon is known as market breadth. When only a few companies account for nearly all of an index's gains, breadth is said to be narrow; when many more companies participate in the move, breadth is considered healthy. Wider breadth is often read as a sign that investor optimism doesn't rely on a few concentrated bets.

The other side of the coin: sales growth

Adding to this, sales growth across the S&P 500 as a whole is at levels not seen in nearly five years. This matters because it distinguishes between companies growing through real business expansion and those whose stock value rises mainly on expectations or market moves without earnings to back them up.

Seeing more companies gain ground against the index, alongside robust sales growth, doesn't guarantee the trend will continue, but it does offer a different context from the one that has dominated recent years, where a handful of companies carried nearly all the weight of market optimism.