The 10 biggest companies in the S&P 500 make up almost 40% of the index, and if Anthropic, OpenAI and SpaceX are added later this year, the concentration could approach 50%, see chart below. The bottom line is that the S&P 500 basically doesn’t offer much diversification anymore.
Our chart book (available here) documents the growing retirement crisis.
AI investment, fiscal stimulus and an ongoing industrial renaissance continue to power the US economy. Yet geopolitical shocks, tariff shifts and inflation above target are creating persistent crosscurrents that complicate the outlook. As the first quarter of 2026 draws to a close, Apollo Chief Economist Torsten Slok examines the tension between solid fundamentals and mounting uncertainty, and what it could mean for investors.
Software faces a massive $40 billion maturity wall in 2028, dominated by lower-rated B- credits, exposing the sector to refinancing risks amid AI disruption and rates higher for longer, see chart below.
With margin debt at record highs, any downturn in stocks risks turning into a sharper correction as leveraged investors are forced to sell into falling markets, see chart below.
Public equity markets have changed significantly over the past decade. The number of listed companies has declined, market concentration has increased and valuations for the largest stocks have reached historically elevated levels. At the same time, correlations within public markets have risen and passive strategies have continued to gain share.
In this video, Co-Head of Apollo’s Aligned Alternatives Eric Hanno discusses why these structural shifts may prompt investors to reconsider traditional equity allocations and evaluate the potential role of an alternative approach to equity.
Key themes include:
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The Standard & Poor’s 500 (“S&P 500”) Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value.
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Our chart book (available here) looks at the simulated effects of $100 oil prices on the economy.
Note: Effects fade over several quarters. Source: Apollo Chief Economist
Consumer spending data from the New York Fed shows a clear K-shaped pattern where growth has been faster for high-income households than low-income households, see the first chart below. The stronger growth in consumer spending for high-income households is driven by the K-shaped growth in wages and wealth, see the second and third chart.
Dallas Fed data show net unauthorized immigration flows turning negative, meaning more individuals are leaving the US than entering, see chart below.
The surge in new US business formation is being fueled by AI and large language models that are dramatically reducing the cost and complexity of launching a company, see chart below. As these firms scale, they will create jobs, underscoring that AI is likely to strengthen, not disrupt, the US labor market.
