Market Rotation from Big Tech to Broad Sectors Gains Momentum

Wall Street's appetite is shifting decisively away from megacap tech stocks toward small caps, energy, and financials. The MOVE reflects a broader market participation not seen since late 2016, when similar breadth preceded a historic post-election rally.

Nvidia, Microsoft, and Broadcom initially cratered after WHITE House tariff threats earlier this year, but their rapid recovery masked a more significant trend. By late June, the S&P 500 and Nasdaq hit record highs with unusual sector diversity—financials, utilities, and industrials all contributing meaningfully.

Technical indicators now show over 70% of S&P 500 constituents trading above their 50-day moving averages, a threshold last breached before the Trump-era market surge. "This isn't just tech dragging markets upward anymore," observes LPL Financial's Adam Turnquist. "The playbook has flipped."

Sevens Report's Tom Essaye attributes the rotation to pure FOMO: "Money that missed the AI trade is now chasing anything with momentum." The breadth surge coincides with crypto markets showing unusual stability, suggesting capital may be seeking beta across asset classes.