Every day it seems the gap just keeps getting wider, and today the YTD performance spread between the Nasdaq and the DJIA widened out to over 20 percentage points – or the equivalent of the traditional threshold for a bull market.  As of Thursday afternoon, the Nasdaq was up 20.4% YTD while the DJIA was barely hanging above the unchanged line with a gain of 0.3%. Since the Nasdaq launched in early 1972, there have only been three other years where the index outperformed the DJIA by more than 15 percentage points YTD through 5/18, but 2023 is on pace to go down as the only year where the performance gap exceeded 20 percentage points.

The question going forward is, will the Nasdaq continue its outperformance for the remainder of the year, or will the DJIA step up and play catch up?  There have only been three other years where the Nasdaq even outperformed by 15 percentage points at this point in the year, but below we have provided a snapshot of both indices during those three years.  For each set of charts, we show the performance of each index in the top charts where the gray shading shows the period from the start of the year through 5/18.  Underneath each of those charts, we also show the relative strength of the Nasdaq versus the DJIA where a rising line indicates outperformance on the part of the Nasdaq and vice versa.

Of the three years shown, the Nasdaq continued to outperform the DJIA by a wide margin for the remainder of the year in two of them (1991 and 2020).  In 1983, on the other hand, the Nasdaq actually declined 8.2% for the remainder of the year giving up all of its prior outperformance as the DJIA rallied 4.6%.

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