Dividend income is often overlooked amid gyrations in the stock market. Consider that in 2024, market bulls were boasting about 24%-plus S&P 500 returns. No one was very focused on the broad market index's 1.2% dividend yield. But dividends are an important element of return, and 2025 for a while was bearing that out. Through May, the S&P 500 was up a thin 1.1%; without dividends, there was essentially no returns at all. Of note, dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100%. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. But not all dividends are created equal, though, and it is important to understand the difference between the two main investment categories: high-yield stocks and dividend-growth stocks.

ASML is the leader in lithography systems for manufacturing semiconductors with 90% market share. Lithography is the process in which a light source is used to expose circuit patterns from a photo mask onto a semiconductor wafer. Lithography allows chipmakers to increase the number of transistors on the same area of silicon, with lithography historically representing a high portion of the cost of making cutting-edge chips. ASML outsources the manufacturing of most of its parts, acting like an assembler. ASML’s largest clients are TSMC, Samsung, Intel, SK Hynix, and Micron.

On Monday, the major indices were tempered by a 5.5% jump in crude oil (WTI) prices, but the large-cap indices still rose from 0.3% to 0.6%. Technology (XLK +2.5%) and Energy (XLE +1.8%) were the only two sectors that rose. Utilities (XLU -3%) were the weakest, followed by Consumer Discretionary (XLY -2%), and Real Estate (XLRE -1.6%). Healthcare (XLV) and Consumer Staples (XLP) fell 1.1%.

The mega-cap indices surged higher for a sixth straight week, and it feels like there is just no stopping this torrid advance. But when it seems like the market will never stop moving in a particular direction, a counter-trend move often kicks in. Indeed, it has to happen eventually.