Stock Rotation Hits Tech Giants as Small Caps Rise
Bloomberg Businessweek
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The people, companies and trends shaping the global economy.
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A tech selloff dragged down stocks from near-record levels amid a rotation into more economically sensitive industries. A flare-up in geopolitical risks lifted oil while gold bounced after a historic rout. Bitcoin hit the lowest since President Donald Trump’s election victory.
The plunge in software makers weighed on trading as Anthropic’s automation tool heightened concerns their core businesses are at risk. The S&P 500 fell 0.8% and the Nasdaq 100 slid 1.6%. In late hours, Advanced Micro Devices Inc. gave a disappointing forecast. Energy firms joined crude higher as the US Navy shot down an Iranian drone headed toward an aircraft carrier in the Arabian Sea.
Despite losses in major benchmarks, most shares in the S&P 500 actually rose. FedEx Corp. - an economic barometer - extended a record-breaking rally. Walmart Inc. topped $1 trillion.
Bets on AI companies have dominated the US equity market for three years, but a growing number of investors are now wagering that run, led by the “Magnificent Seven” megacaps, is giving way to broader market participation. In fact, a violent rotation has taken place in 2026, with value shares far outpacing growth.
Today's show features:
- Bloomberg News Senior Editor, Equities Americas Eric Weiner on the Tuesday trade and Wall Street’s rising jitters centered around AI’s impact on software companies
- Neil Dutta, Partner and Head of Economics at Renaissance Macro Research, on the US monetary policy outlook and President Donald Trump choosing Kevin Warsh as his nominee to lead the Federal Reserve
- Bloomberg News Real Estate Reporter Patrick Clark on homebuilders’ plan for a massive program to develop "Trump Homes" to address the US affordability crisis
- Jaime Magyera, Managing Director, Head of US Wealth Advisory and Head of Retirement at BlackRock, on key investing and retirement planning trends
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