The dividend yield of the US index has hit an all-time low of 1.04 per cent, well below its historical average – between 1.8 per cent and 2.5 per cent per annum over the long term – as a result of the dominance of large technology firms that pay no dividends, or pay very few.
The dividend yield of the S&P 500 is not looking good. It has hit an all-time low of 1.04 per cent, below the 1.09 per cent recorded during the dot-com bubble, and well below its historical average, which typically ranges between 1.8 per cent and 2.5 per cent per annum in the long term.
Among the reasons for this is the dominant position of the big tech firms in the index, which, focused as they are on their massive development investments, are not yet in a position to pay dividends.
In fact, these major global tech firms (such as Microsoft, Alphabet, Amazon, Meta and Oracle) are allocating record levels of capital expenditure (Capex), projected to be between $650 billion and $745 billion. This massive spending aims to secure the critical infrastructure needed to dominate artificial intelligence and expand their data centres
Back in April this year, when the dividend yield of the US’s most representative index stood at 1.24 per cent, Adam Parker, founder of Trivariate Research, noted that “the proportion of companies paying dividends stands at 56.5 per cent, a figure similar to that of the last 25 years. It is therefore clear that the largest companies by market capitalisation, with low or no dividends, are the ones driving this trend”.
To compensate, investors are clinging to higher share returns. In 2026, the performance of major technology firms and artificial intelligence infrastructure companies in the S&P 500 is showing strong momentum. Hardware, memory and server companies such as SanDisk, Dell and Micron are leading the index with gains of over 200–400 per cent. The Nasdaq Composite, the US technology-focused index, has recorded a rise of around 12.8 per cent in the first half of the year.
