Analysis: Most U.S. stocks are following a pattern of declining without participating in gains, leading to extreme market polarization.

BlockBeats reports that on November 6, KobeissiLetter released a market analysis stating that we are witnessing extreme divergence in the U.S. stock market. The three-month average stock correlation for the S&P 500 has dropped to 0.13, approaching the lowest levels since 2018. This indicator measures how individual stocks in the S&P 500 move relative to the index. A lower correlation suggests that most stocks are moving independently rather than following the overall market trend.

In comparison, during the market crash in April, the average stock correlation was around 0.50. In short, the U.S. stock market has become highly decentralized, with a few large-cap tech companies driving most of the gains. The majority of stocks have not participated in this rally, showing a pattern of lagging behind the market.