The S&amp;P 500 is chugging along at a solid rate, as it’s up 17% over the past year and up 2.5% over the past month. Market mavens should like what they see as the index crests the 6,950 mark, with 7,300 very much in play.



Still, some S&amp;P 500 stocks may not be worth the effort in 2026, as downside economic forces, sector underperformance, and plain old bad luck hold some index stocks down and put them squarely on the chopping block.



Many such stocks make that list, Wall Street observers say.



“There’s certainly a rotation underway,” said Ilir Salihi, founder and senior editor at IncomeInsider.org. “We’re seeing mega-cap tech stocks cool while overall breadth is improving across the index.”



Salihi noted that on January 14, over half the S&amp;P 500 rose even though the index as a whole dropped and the Magnificent 7 underperformed the market. “That’s a healthy signal for the market, as the one-sector dominance that defined most of 2025 is giving way to a more diverse and likely more sustainable scope of growth across small caps and energy stocks.”



While consensus forecasts show modest upside for the S&amp;P 500 in 2026, valuation metrics are rising by historical norms, and volatility continues to vex investors, setting the stage for selective trimming of positions.



“Through mid-January, the S&amp;P 500 is still slightly positive year-to-date, but we’re already seeing how quickly sentiment rotates, driven in large part by banks/earnings, rate expectations, and ‘priced-perfect’ technology stocks,” said Dr. Peter Klein, founder at Fairvalue-Calculator, a stock valuation and portfolio analysis platform. “The big takeaway: concentration risk is still huge, as a few names can drive the index, both up and down.”



Which S&amp;P 500 stocks slide to the downside on that ledger? Here are three index “sell” candidates to mull over.



<h3>Tesla</h3>



Trading at $440 per share and down about 9% over the last month, Tesla (NASDAQ:TSLA) shares are at best taking a breather or, at worst, signaling a sustained downward slide.



“TSLA is facing rising price pressures and accelerating competition, both domestic and overseas, particularly from China’s BYD (OTCPK:BYDDY),” Salihi said. “Last year, deliveries fell by about 8.6% year over year, and the Cybertruck is badly underperforming expectations in sales volume.”



Major Wall Street fund managers are shedding TSLA shares right now. Exhibit ‘A’ is the ARK Innovation ETF (BATS:ARKK), which sold 86,139 shares of Tesla, even though Tesla comprises about 10% of its portfolio. Additionally, overseas competition, especially from Chinese electric vehicle maker BYD Co, recently surpassed Tesla in the EV arms race, as demand for BYD’s vehicles rises.



That’s not all. An inflated upside outlook from legions of Tesla enthusiasts may also be wearing thin on TSLA shares.



“For Tesla, pricing pressure + margin sensitivity makes the risk and reward issues less attractive versus its already-high expectations,” Klein noted.



<h3>GE HealthCare Technologies</h3>



Chicago-based GE HealthCare Technologies (NASDAQ:GEHC) has faced notable challenges due to declining sales in China, with year-over-year decreases of approximately 11% and 18% reported in the first and second quarters of 2024, respectively, according to Benzinga analysis.



GEHC, currently trading at $82 per share and flat over the past month, was recently downgraded by UBS, citing competitive pressures and rising generics risk that analysts believe are not fully priced in.



The medical technology company, which has built robust market share in imaging and ultrasound equipment markets, may fall victim to investor enthusiasm as its stock nears all-time highs. Yet looming threats to profitability suggest limited upside for GEHC, and even more downside risk as the company’s core product franchises face increased competition from the med tech market.



If there’s any reason to hang on to GEHC shares, it’s the steady, but modest, dividend payout, which has held steady over the past five quarters, and currently offers a forward yield of 0.18%.



<h3>UnitedHealth</h3>



2025 wasn’t kind to Eden Prairie, Minn.-based healthcare coverage company UnitedHealth (NYSE:UNH), as it stared down a big increase in medical costs amid other health care industry obstacles. This led the UNH C-suit management to curb earnings guidance last spring before backing off completely one month later. Consequently, UNH shares plummeted by 45% at one point, and is now down 34% over the past year



Trading at less than $340 per share, UNH now faces anticipated declines in its Medicaid margins, which are projected to fall from -0.1% in 2025 to -1.8% in 2026, largely driven by the termination of approximately 300,000 lives following new Medicaid work requirements, according to Benzinga analysts.



“With UNH, there’s just enough uncertainty to wait for clearer visibility,” Salihi noted. “As it stands, UnitedHealth faces a lot of headline and policy risk as Medicare Advantage plans are retrenched in many counties in 2026, and the company is facing new Senate scrutiny of ‘aggressive’ diagnosis practices. To minimize risk, I’d sell and reassess next year.”



<h2>What Investors Should Be Tracking Right Now</h2>



Investors looking for warning signs have plenty of places to look.



“The focus should be on the deteriorating fundamentals, such as units, margins, or occupancy rates going the wrong way,” Salihi said. “Next, look at rising policy or regulatory overhangs that could impede growth. For instance, antitrust suits in the tech world or disruptive healthcare reimbursement policies in the insurance sector.”



So what are the main warning signs that it’s time to shed a stock?



“When valuation stops making sense versus realistic growth, margins start eroding, management pivots become defensive, or a stock needs ‘perfect news’ just to hold its price, that’s often the exit signal,” Klein said.

GEHC

TSLA

The S&P 500 has risen 17% over the past year, but some stocks may struggle in 2026 due to economic pressures and sector underperformance. Analysts suggest selective trimming of positions, highlighting three stocks to sell: Tesla, facing competition and declining deliveries; GE HealthCare, with declining sales and competitive pressures; and UnitedHealth, which is experiencing rising medical costs and declining Medicaid margins. Concerns about concentration risk in the index persist as market sentiment shifts.

- The S&P 500 has risen 17% over the past year, reaching significant levels, with some stocks underperforming due to economic pressures.  
- Wall Street experts like Ilir Salihi highlight a sector rotation, indicating a decline in major tech stocks while smaller caps thrive.  
- Investors are advised to monitor stocks like Tesla, GE HealthCare Technologies, and UnitedHealth, which face notable challenges and may require reassessment in light of deteriorating fundamentals.

3 S&P 500 Stocks to Sell in 2026