The record-setting run for the S&P 500 (^GSPC) has a few potholes in it that look to be getting larger.

On Friday, the S&P 500 closed 7.7% above its 50-day moving average, yet only 52% of its components closed above their own 50-day moving average, BTIG strategist Jonathan Krinsky pointed out in a new note. In the past 30 years, the S&P 500 has never had fewer than 55% of its components above their 50-day moving averages when the index itself was at least 7% above its 50-day moving average, Krinsky noted.

Further, since 1990, Friday’s session was just the third time ever that the S&P 500 had more new lows than highs on a day when the S&P 500 itself made a new high.

Read more: How to protect your money during turmoil, stock market volatility

“As semis and tech continue to push higher, the debate around whether it's sustainable or warranted seems to be growing in tandem,” Krinsky wrote. “What started as an AI/semi conversation, however, should now be shifting to the rest of the market. So in addition to asking when does the SOX [Philadelphia Semiconductor Index] top, we should also be asking: why can't anything else rally?”

Krinsky added, “Even if the tech/AI price action is justified, there is a difference between tech leading when most stocks are going up, and semis going parabolic when most non-tech stocks are moving sideways or lower. Perhaps the market is simply taking its time before we see the long-awaited broadening, but if we keep seeing 52-week lows expand, it's more likely we see tech 'catch-down' as opposed to the average stock 'catch-up'.”

The stock market backdrop, at a glance: The US stock market's climb to record highs this month is being propelled by a powerful triple threat of fundamental drivers: strong corporate earnings led by big profit beats, a surprisingly resilient labor market, and easing geopolitical tensions.

An impressive 84% of S&P 500 companies have beaten profit expectations — the strongest performance since 2021. Meanwhile, a robust April jobs report showing 115,000 jobs added signaled that the broader economy is successfully navigating higher inflation brought on by the Iran conflict.

Read more: How jobs, inflation, and the Fed are all related

At the center of this bull run is the tech sector, which continues to dominate market performance as the primary beneficiary of a massive $700 billion plus capital expenditure boom in artificial intelligence. Tech stocks, particularly the "Magnificent Seven" such as Nvidia (NVDA) and fellow semiconductor giant AMD (AMD), are fueling a lot of the latest optimism.

This isn't just speculative hype; it's backed by a record-setting surge in data center revenue and strong growth at tech companies.

Bottom line: The call-outs from Krinsky warrant attention over the next few trading days. They could signal a broader market nearing a short-term top, or ultimately prove to be nothing to worry about.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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