Wall Street regained momentum on Tuesday as upbeat corporate earnings encouraged risk appetite, pushing the S&amp;P 500 to fresh all-time highs and sending the SPDR S&amp;P 500 ETF Trust (NYSE:SPY) to new record levels. The S&amp;P 500 briefly touched 6,990 during midday trading, with technology and utilities leading the gains.



Those advances helped offset sharp losses in health care stocks after a proposed Medicare Advantage payment update from the Trump administration sent insurers tumbling.



<h2>SPY's Performance Remains Hard To Ignore</h2>



SPY, the world's largest ETF with just under $700 billion in assets under management, continues to deliver strong returns. The fund has gained about 16% over the past year.



Despite roughly $10 billion in net outflows in 2025 (per data aggregated by Etfdb), the fund still grew by nearly $90 billion in assets, largely reflecting market appreciation rather than fresh investor inflows. The divergence underscores SPY's sheer scale and sensitivity to rising equity prices.



<h2>Risk Lurks Beneath The Rally</h2>



While the headline performance looks strong, concentration risk remains a concern. A small group of mega-cap technology stocks continues to account for a disproportionate share of the index's gains, leaving SPY more exposed to sector-specific pullbacks. Companies such as Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Nvidia Inc (NASDAQ:NVDA), Amazon Inc (NASDAQ:AMZN) and Alphabet, Inc (NASDAQ:GOOGL) together account for a big chunk of the S&amp;P 500's market capitalization, leaving overall index performance heavily dependent on their earnings and outlooks.



Tuesday's trading session illustrated that imbalance, as tech strength masked weakness in other areas of the market. At the same time, sharp losses in health care weighed on the market after a proposed Medicare Advantage payment update from the Trump administration sent major insurers such as UnitedHealth Group Inc (NYSE:UNH), Humana Inc (NYSE:HUM) and CVS Health Corp (NYSE:CVS) sharply lower, between 15% and 20%. The divergence highlighted how gains in a narrow leadership group can mask underlying weakness across large parts of the index.



For SPY holders, the dynamic cuts both ways. Concentration has amplified returns during periods when mega-cap tech outperforms, but it also raises the risk of sharper drawdowns if sentiment toward those stocks shifts. Any earnings disappointment, regulatory scrutiny or slowdown in AI-related spending could have an outsized impact on the ETF's performance.



The growing dominance of these stocks has prompted some investors to reassess whether traditional cap-weighted exposure still suits their risk tolerance, particularly as valuations for several large technology names sit well above historical averages.



<h2>Alternatives Target A Changing Index</h2>



That concentration has helped fuel interest in alternative S&amp;P 500 strategies. The Tema S&amp;P 500 Historical Weight ETF Strategy (NYSE:DSPY) aims to address today's top-heavy index by adjusting weights based on historical concentration levels. The fund has gained 20% in the past 12 months, outperforming SPY over the same period. 



Other funds, such as the Invesco S&amp;P 500 Low Volatility ETF (NYSE:SPLV), focus on reducing downside risk, while the Technology Select SPDR ETF (NYSE:XLK) offers targeted exposure to the sector driving much of the index's performance. Although over the past year, SPLV has remained largely flat, XLK has surged more than 30%.



As SPY climbs to new highs, investors face the dilemma of whether broad, cap-weighted exposure still fits their risk tolerance. For long-term, diversified investors, SPY still makes sense. Despite concentration in mega-cap tech, it provides broad exposure to the U.S. market, has a long track record, and historically rewards patient holders. Its sheer liquidity make it hard to beat for a &#34;core&#34; portfolio allocation.



For risk-sensitive or tactical investors, concentration risk might be too high, which can push them toward complementary or alternative S&amp;P 500 strategies. Basically, SPY remains a solid default for most investors, but it's no longer the only way to access the S&amp;P 500 efficiently.



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SPY reaches all-time highs as strong earnings boost the S&P 500, with technology and utilities leading gains. Despite $10 billion in net outflows, SPY's assets grew by nearly $90 billion due to market appreciation. However, concentration risk from mega-cap tech stocks raises concerns about potential drawdowns. Alternatives like the Tema S&P 500 Historical Weight ETF Strategy and Invesco S&P 500 Low Volatility ETF are gaining interest. While SPY remains a solid choice for long-term investors, risk-sensitive investors may seek alternative strategies due to high concentration risk.

- Wall Street saw gains on Tuesday as strong corporate earnings propelled the S&P 500 to new all-time highs, with technology and utilities leading the charge.  
- However, health care stocks faced significant losses due to a proposed Medicare Advantage payment update, exposing concentration risks within the index, as mega-cap tech stocks heavily influenced overall performance.  
- While SPY remains a solid investment, concerns over concentration risk prompt some investors to consider alternative strategies for accessing the S&P 500 efficiently.

SPY At Record Highs: Still A Core Holding, Or A Crowded Trade?