The benchmark S&P 500 Index is wrapping up its second straight quarterly gain, rising 5.50% through Thursday and adding to the 7.08% surge in the final three months of 2022. This will be cheered as good news, confirming the stock market’s recovery from last year’s bear market and resiliency in the face of stubbornly high inflation, rising interest rates and bank failures. Don’t fall for it.

Underneath those topline numbers lurks a disturbing development — a very small percentage of stocks actually account for the rise. If not for a handful of highfliers such as Nvidia Corp., Meta Platforms Inc., Tesla Inc., Warner Bros Discovery Inc., and Advanced Micro Devices Inc., which all chalked up gains of between 50% and 87%, the S&P 500 would be struggling. In fact, when all stocks are weighted equally, the index is actually little changed, rising less than 0.5% for the quarter. Broader measures of the stock market, such as the New York Stock Exchange Composite Index, are essentially flat.

On Wall Street, this is known as bad breadth and a sign that despite the outward appearance of health, all is not well with the stock market. Longtime Wall Street watcher Ed Yardeni, who is credited with coining terms such as “bond vigilante” and “Fed model” highlighted the diverging performance between the S&P 500 and its equally weighted alternative in a note to clients this week. He pointed out that the ratio between the two tends to peak before recessions — making the recent January high a cause for worry. Other measures of breadth also signal weakness: the number of equities on the New York Stock Exchange trading above their 200-day moving average is lower that the average for the past decade; the same is true for the number of stocks hitting new 52-week highs less those touching 52-week lows.

To Yardeni’s point, it just so happens that Bloomberg’s latest monthly survey of economists puts the odds of a recession happening within one year at a lofty 65%, which is well above the average of about 25% going back to 2008. The same survey anticipates gross domestic product expanding at an anemic 1% in 2023. When you factor in the recent bank runs that led to the collapse of Silicon Valley Bank and the likelihood that the nation’s lenders will respond by tightening credit further, that 1% forecast may end up being generous.

To be sure, predicting recessions lately has been a fool’s game. Many market participants expected an economic downturn to hit last year but were forced to push back those forecasts as the economy consistently surprised to the upside. Where they went wrong was in applying rules found in the pre-pandemic playbook that no longer apply. No one had experience with an economy that stopped abruptly, shed some 17 million jobs and contracted 31% only to quickly rebound with the help of trillions of dollars of free-money government programs. Those repercussions lasted throughout 2022 and are arguably still being felt.

In that sense, there is support for equities that should limit the downside. Consider the Dow Jones Transportation Average, generally considered an early warning indicator. The thinking here is that if the shares of companies that are responsible for shipping goods and people around the country are struggling, then that’s a sign business, and by extension, the economy isn’t very good. So it should be comforting that not only is the index up 5.51% this quarter, but it’s led by a 30% surge in Fedex Corp., followed by trucking company Old Dominion Freight Line Inc.’s 17.6% gain. Rounding out the top five are United Airlines Holdings Inc., American Airlines Group Inc., both of which have touted the strength of the consumer, and Avis Budget Group Inc.

Also, corporate America has retained a lot of earning power. Although profits may not rise much this year, if at all, the $219 a share that Wall Street analysts expect members of the S&P 500 to generate is about 37% higher than in 2019. That’s one reason why the S&P 500 is up about 25% since then while providing a pretty solid floor for stock prices.

And shouldn’t the widely anticipated end of interest-rate increases by the Federal Reserve spur a rally in stocks, like they have in the past? As my Bloomberg Opinion colleague Jonathan Levin wrote this week, maybe not this time. For one, inflation remains elevated, which should keep the Fed from — unlike in the past — resorting to rate cuts anytime soon and bond yields from falling. That matters for stocks because simple discounted cash-flow analysis shows that higher interest rates render future earnings less valuable in the present, making it hard to justify the current high multiples for stocks without strong profit growth. At 18.5 times, the S&P 500’s price-to-earnings ratio is well above the average of 16.2 times that we’ve experienced from the end of the financial crisis in 2009 through to the end of 2019 right before the pandemic hit.

The smart money seems to agree that stocks are expensive. The North America Investor Confidence Index, which is derived from actual trades by institutional investors rather than survey responses, has yet to recover from a dive it took last year to levels that in the past have foreshadowed struggles in the stock market. The index is managed by State Street Global Markets, which has about $38 trillion of assets under custody or administration, and was at 73.9 for March, below its average of 99.8 going back to 2000. (A level of 100 is considered neutral, while readings above that indicate investors are increasing their long-term allocations to risky assets and below indicates the opposite.)

So where does that leave stocks? Probably stuck in a sort of no man’s land for the foreseeable future. The S&P 500 has been oscillating between a broad range of 3,800 and 4,200 since early November, with no true catalyst to take it higher and just enough support to keep it from nosediving. It’s true that no matter what stocks are doing at any particular time one can find metrics that argue they should be doing the opposite. And granted, the difference in performance between the S&P 500 and its equal-weighted counterpart isn’t huge, but the euphoria that seems to be building about the dawn of a new bull market after two straight quarterly gains and the weathering of a minor banking crisis needs a reality check.

Oh, and the last time the S&P 500 Index rose more than its equal weight counterpart by as much as it has this quarter? That would be the final three months of 1999. Uh oh.