The S&P 500’s headline calm has masked a sharp internal reshuffle, with money rotating away from crowded AI-linked trades as investors start demanding clearer evidence that heavy spending will turn into profits, according to JPMorgan Private Bank’s Global Investment Strategist, Kriti Gupta.
That shift is playing out even as aggregate earnings growth reached 47.4% and beat early estimates, offering a fundamental counterweight to the pressure on speculative tech.
In a recent note, Gupta explained that the S&P 500 has hovered near record territory while the equal-weight version pushed to a new high, a split that points to leadership changing beneath the surface.
The note described it as one of the biggest rotations in years, with earlier winners slipping and lagging, while more cyclical areas are catching bids.
Why Sector Rotations Signal Market Shifts Chips have been a focal point of the reversal: the Philadelphia Semiconductor Index fell nearly 24% from late June, while healthcare gained roughly 9% and financials rose about 5% over the same stretch.
