Equal-Weight S&P 500 Beats the Index by 5.85 Points: Best Month Since 2009

The average S&P 500 stock just had a historic month. The equal-weight S&P 500 beat the standard cap-weighted index by 5.85 percentage points in October 2026 — its largest monthly outperformance since April 2009 and its second-best month since 1990 — even as the headline index fell.

The short answer: what happened in October?

The Invesco S&P 500 Equal Weight ETF (RSP), which gives every company in the index roughly the same weight, rallied almost 5% in October and rose for a fourth straight week, according to FactSet data cited by MarketWatch. The cap-weighted S&P 500, where a handful of mega-cap technology companies dominate, fell 0.9% for the month. That gap — 5.85 percentage points, per Seeking Alpha's analysis of index data — is the story: October's pain was concentrated in the biggest tech names, not spread across the whole market.

Why is this blowing up now?

The numbers landed with Friday's October close, and the reversal from September is stark. In September, equal weight trailed the cap-weighted index by 4.61 percentage points. In October it beat it by 5.85 points. That is a 10.46-point swing in a single month — the largest monthly swing in either direction since at least 1990, according to Seeking Alpha. Traders and strategists are sharing the stat because it reframes a scary month: the Nasdaq Composite fell 5.3% in October, its worst month since March 2025, yet the typical stock in the S&P 500 actually gained ground.

What drove the split?

Investors punished the artificial-intelligence trade in October over worries about dwindling free cash flow and rising borrowing costs at companies pouring money into data centers. The S&P 500's information-technology sector fell 6.8%, its worst month since March 2025, and the PHLX Semiconductor Index plunged more than 15%, with Intel down 28.6% on Friday alone. Momentum funds loaded with tech were hit hardest: the Invesco S&P 500 Momentum ETF (SPMO) lost 10.1% in October and the iShares MSCI USA Momentum Factor ETF (MTUM) lost 10.5%.

The money did not leave stocks — it rotated. The iShares MSCI USA Quality Factor ETF (QUAL), which holds companies with stable earnings and low debt, ended October slightly positive, up 0.1%. Defensive sectors surged: the consumer staples ETF (XLP) soared 10.9% in October, its largest monthly gain since it began trading in 1998, according to Dow Jones Market Data. Healthcare and utilities also rallied. Dividend stocks told the same story in a separate Horizon Investments analysis: the Dow Jones Dividend 100 Index was up 8.4% this quarter through late October, while the Nasdaq-100 was down 4.8% over the same period.

Key facts, at a glance

• Equal-weight outperformance: +5.85 percentage points in October — largest since April 2009, second-largest since 1990.
• The swing: 10.46 points versus September, when equal weight trailed by 4.61 points.
• RSP: up almost 5% in October, four straight weekly gains (FactSet via MarketWatch).
• Cap-weighted S&P 500: down 0.9% in October; Nasdaq down 5.3%.
• Momentum ETFs: SPMO down 10.1%, MTUM down 10.5% in October.
• Consumer staples (XLP): up 10.9% — its best month ever since 1998.

What does it mean — and what is next?

Strategists quoted by MarketWatch describe the move as investors buying quality and defensives rather than abandoning equities. LPL Financial's Jeff Buchbinder said his team is "buying quality," getting a value tilt and less exposure to the lower-quality end of the AI trade. Empower's Marta Norton pointed to lower debt and consistent earnings as the traits investors want while AI spending is questioned. The caution: Seeking Alpha notes that equal-weight surges this large have appeared in both bull and bear phases historically, so the stat alone does not predict where the broader market goes next. The next tests arrive quickly — Apple reports earnings after Monday's close, U.S. midterm elections are Tuesday, November 3, and the October jobs report follows on Friday.

Sources: Seeking Alpha — 2nd Best Month For Equal Weight Since 1990; MarketWatch — The stock market's front-runners stumbled in October; AdvisorAnalyst — The Rotation Is Real.

FAQ

What is the equal-weight S&P 500?

It is the same 500 companies as the regular S&P 500, but each company gets roughly the same weight instead of being weighted by market value, so smaller members count as much as mega-caps.

By how much did equal weight beat the regular index in October 2026?

By 5.85 percentage points — its largest monthly outperformance since April 2009 and its second-largest since 1990.

Why did the average stock rise while the Nasdaq fell 5.3%?

October's losses were concentrated in large technology and AI-linked stocks, while defensive, quality and dividend stocks — which weigh more in an equal-weight index — rose.

Does this mean the market selloff is over?

Not necessarily. Historically, equal-weight outperformance this large has occurred in both bull and bear phases, so analysts say it shows rotation within stocks rather than a clear direction call.