The market shifts focus from AI to finance and industry: a macrotrend analysis
The market is entering a new phase, and my analysis confirms that the dominance of artificial intelligence as the sole driving force is beginning to wane. Capital is flowing into sectors that have long remained in the shadow of tech giants. This is not just a change of favorites, but a fundamental shift that will define the dynamics for 2026.
I see clear signals of capital rotation. The S&P 500 Equal Weight Index is actively narrowing the gap with its capitalization-weighted counterpart. This is a classic sign that "leadership" is expanding beyond a narrow group of mega-cap stocks. Investors are no longer blindly following a couple of companies and are starting to seek value across a broader range of assets.
Cyclical Sectors Gain Momentum
The most indicative is the behavior of the Vanguard Extended Market ETF, which tracks the performance of companies outside the S&P 500 index. It is strengthening in sync with small-cap value stocks. The iShares Russell 2000 Value ETF has shown steady growth since the start of the year. This is direct evidence that not only the usual growth "blue chips" are participating in the rally, but also a wide range of securities that were previously ignored.
The sector picture looks even more compelling. The financial sector is confidently approaching its 200-day moving average, industrial companies have already broken through significant resistance levels, and the biotech sector is emerging from a prolonged consolidation phase. This is a cyclical manifestation of improving expectations for the real economy. Capital is beginning to look beyond the mega-corporations of the AI industry.
Semiconductor Fatigue and Rebalancing
Notably, the momentum in the semiconductor sector, which was the locomotive of the entire rally, is beginning to show signs of fatigue. Parabolic movements inevitably correct, and chips are no exception. Quarterly index rebalancing will only amplify this shift, forcibly redistributing capital from overheated positions.
Expert Commentary: The current rotation is not a temporary anomaly, but the beginning of a larger trend. The "memory" market is giving way to the "value" market. For investors accustomed to betting solely on AI, it is time to reconsider their portfolios. Sectors that have long been in the shadows—finance, industrials, and biotech—offer a much more attractive risk-reward ratio on the horizon of 2026.