r/stockmarket
The Market Rotation and Broadening Trade has commenced.
Rotation shifts funds from tech/semis to broader sectors like healthcare, as hot economic data and macro risks weigh on speculative tech.
- Strong economic data like BLS jobs and home sales supports a broader market rotation.
- Sectors such as healthcare and leisure/hospitality are showing strength and absorbing capital.
- April CPI and prolonged Iran-US conflict will weigh on the speculative tech and semiconductor rally.
- Market concentration in semis is unwinding, serving as a wake-up call for tech bulls.
The past 2 months has seen a concentration in growth within the semiconductors and the adjacent players (energy, utilities, materials).
Friday was a wakeup call. Of course, meanwhile the meme tech stock subreddits would insist their words carries more weight than a simple correlation test.
https://preview.redd.it/tyyiqt756e6h1.png?width=960&format=png&auto=webp&s=e6dce8a73eb72a9624423fd785074143b0fc4cb1
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The rotation is clear in the first week of June 2026. The April BLS jobs report and stronger than expected new and existing US home sales cements the case of a hotter economy (albeit mostly in healthcare with leisure and hospitality being the runner up).
The April CPI and prolonged Iran - US conflict will continue to weight on the highly speculative tech and semis rally.
Diggin the graphs man keep it up
so what is the most appealing sector? i’m tryna learn these graphs
What's "carrying" the US market is tech. Though look at most of these tech companies' P/E ratios. Meaning what investors are valuing them vs what can be justified via earnings. Anything over 20 for a large cap is disastrous. Sooner or later people will realize earnings can never justify these market caps and the bubble will burst. We will see massive sell-offs market wide. And since these tech stocks are carrying US indexes, and in consequence index funds. We can see market collapse. This is bad.
Bonds, the stocks will crash 50%+ because of that bullshit bubble.
Bonds are absolute shit with all this inflation. Literally no point in buying them since 2019
You say rotation but it’s too early to tell
I'm seeing Ground Transportation, Tech Hardware, and Consumer Staples emerging on my radar as we rotate. The Semiconductor industry might have had it's major rally for the year and needs to catch it's breath first before we continue.
Tech hardware is based off on a simple pillar of "token maxing" - what happens the willingness of private credit market to continue taking on higher risk with higher rates, weaker consumer spendings and a lack of clarity to tech - derived profits?
Consumers staples and defensive: good because they are vital to survival.
Ground transportation, companies supplying big farming machineries and farming inputs like urea and nitrogen: are great from the mid - long term (short - term volatility as farmers pullback on spending).
Utility and industrials involved in microgrids, green/ pink hydrogen production and Solid Oxide Fuel Cells: Are all great in the mid - long term given that the energy crisis today presents an existential crisis to Europe and China at the political and economic front.
I see mobility and new materials. EVTOLs will be a good option: greener, low noise, less expensive
The problem it's unknown if we will see a positive outcome in sector broadening, as the alternative outcome is full-index sell off.
It won't be a full - index selloff unless the climate warrants it.
The data shows that there are rotation from tech sector within an index into the more tangible sector (old economy).
The need for liquidity can override macro logic. If over leveraged positions at near ATHs are deeply red, other unrelated assets correlate to 1.
That is my concern.
And you see, from what we've seen since the Nasdaq bottomed in late 2022, any attempts to broaden have just ended in tears instead of being positive over the last 4 years.
Well, tears in the short-term at least.
The latest time was well hidden initially and pretty darn aggravating. I date it back to late October really. In the end, it wasn't a deep dip, but the 4 months range from late October before the dip occurred was hair pulling out caliber for me.
Still recovering from being hyperfixated lol. It isn't as bad as it was last year, but I still have further to go.
Ok. Now show more than 3 months.
What's the point in doing so?
Did you read the OP?
Too early to tell
The breadth data supports the broadening read, just less dramatically than Friday felt. About 59 percent of stocks are above their 200 day average, the advance decline line is rising and above trend, and concentration has gone slightly negative for the year. In my own testing the sector story mattered less than where the evidence pointed week to week. The portfolio that lived in tech one year carried a heavy energy weight through 2022 and held every sector at one point or another across the test window. Themes end, and following the data across sectors is what survives the handoff.
Didn’t they say the same thing after Trump got elected and after Liberation Day and then the Iran Conflict and yet we always return back to AI?
wait how does the broadening trade even start
Are you asking me what prompts the capital outflow from the AI trade?
PQ