The Great Broadening Debate

研报英文原文证据摘录

The Great Broadening Debate

Macro Research

Portfolio Strategy

Accounting and Tax Policy

Special Situations

June 8, 2026

Markets Broadening Out this Year? It’s Just Been Within Tech!

Key Points

All Good Things Must Come to an End. The S&P 500 broke its streak of positive weekly

gains as a blowout jobs report on Friday stoked investor fears that the Fed might raise interest

rates later this year and as US-Iran tensions flared up again. It didn’t help either that Alphabet

is raising equity with news reports that Meta is next. We don’t see last week’s events as a

change in trend, but U.S. markets are shifting into a more hyper-sensitive mode with respect

to inflation and employment trends as oil prices remain high, particularly against a backdrop

of a new and untested Fed Chair. However, once markets move past this week’s inflation

prints without any negative surprises, news flow will likely shift back to AI and SpaceX’s

planned IPO which should revive animal spirits once again. With 24 out of the top 25

performing stocks in the S&P 500 year-to-date being AI related, and data center spending

showing no signs of slowing down, we remain bullish on the market with Tech/Semis as our

favorite groups.

The Great Broadening Debate. For the wrong reasons, markets broadened out late last week

into more defensive sectors. Our sense is that markets are unlikely to really broaden out other

than for a few areas, such as Discretionary (which we’d own), if a deal is struck with Iran and

oil prices fall. However, we see any broadening out (across sectors) to be short-lived again. In

this note, we discuss key reasons why we see narrow leadership in stocks this year, rather

than a full-scale broadening out, including: 1) Fund Flows & Retail Investors, 2) Scarce Secular