Since the end of February 2015, the S&P 500 has traded between 2,050 and 2,140, a 5 percent range. Year to date, index has generated a total return of about 2.7 percent, its slowest start in five years.
But beneath this placid surface, a number of trends have emerged that create risks and opportunities for savvy investors.
Shares of US multinationals have lagged the market this year, as a strong dollar reduces the value of repatriated foreign earnings.
This headwind helps to explain why the Russell 2000, an index that tracks small-cap stocks, has outperformed the S&P 500 this year by a more than 2-to-1 margin; smaller companies tend to have less exposure to international markets than their large-cap peers.
The three best-performing sectors in the S&P 500 have generated an average total return of 4.9 percent thus far in 2015, compared to a mean loss of 5.4 percent for the worst three performers.
This wide divergence in sector performance offers myriad opportunities for active investors to outperform the broader market.
As we warned in Looking for a Pullback, the risk of the S&P 500 suffering a 5 percent to 10 percent correction remains elevated.
That the index has failed to rally to more than 2,140 despite stronger-than-expected retail sales, employment numbers and orders for durable goods highlights the underlying weakness in the stock market and underscores the potential downside risk.
And although the S&P 500 has remained range-bound in recent weeks, the number of stocks leading the market higher has deteriorated significantly.