S&P 500's worst day since October has a major asterisk

Friday, June 5, handed S&P 500 investors their roughest league successful 8 months.

A stronger-than-expected jobs study landed earlier the open. Bond yields jumped, and the spot and tech names that carried the marketplace to grounds highs each twelvemonth abruptly led it lower.

By the close, the S&P 500 (SPY) had dropped 2.6%, its worst time since October 2025.

But the header fig hid thing utile for mundane investors.

If you held the scale done a fashionable money similar SPY oregon VOO, you felt the afloat 2.6% drop. If you held the equal-weight version, you barely noticed.

That quality successful outcomes reveals cardinal signals for anyone deciding connected however to ain the S&P 500.

Why SPY and VOO fell hard portion equal-weight RSP held up

The harm was concentrated, not broad.

The SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO) value companies by marketplace cap, truthful the largest stocks determination the money the most.

A tiny group of trillion-dollar tech names present makes up astir a third of that index.

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When those names autumn together, a cap-weighted money falls with them.

The Invesco S&P 500 Equal Weight ETF (RSP) does the opposite. It gives each astir 500 companies the aforesaid weight, truthful Apple counts nary much than a mid-sized bank.

On Friday, stocks crossed the scale were adjacent to evenly divided betwixt winners and losers.

That adjacent divided is wherefore RSP fell lone a fraction of what SPY and VOO did.

What SPY, VOO, and RSP really way

All 3 funds clasp the aforesaid 500 companies. The quality is however overmuch of each they own.

SPY and VOO are cap-weighted, meaning a stock’s portion of the money matches its marketplace value. The bigger the company, the bigger its propulsion connected your returns.

RSP is equal-weighted, truthful it trims the giants and leans connected the mean institution instead. That gives it a tilt toward industrials, financials, and mid-sized names, Invesco’s money information shows.

The trade-off runs some ways.

According to 24/7 Wall St., RSP has outpaced SPY by adjacent to 5 points successful 2026 by sidestepping the mega-cap tech crowd. In years erstwhile those aforesaid giants surge, it lags.

The non-Magnificent Seven stocks that got deed hardest

The selloff centered connected richly valued chipmakers, not the wide market. The hardest hits came from names extracurricular the Magnificent Seven.

Friday’s biggest non-Mag-7 decliners:

• Micron (MU) sank 13.3%, the worst driblet successful the S&P 500, BNN Bloomberg reported.

• Marvell (MRVL) fell much than 16% aft moving up astir 223% connected the year.

• Broadcom (AVGO) dropped 7.9% aft its AI gross guidance failed to wide sky-high expectations.

• Lululemon (LULU) slid 8.6% connected a chopped to its full-year income and nett forecast.