The leadership baton is passing among sectors. Bespoke highlights a striking reversal: S&P 500 semiconductor shares rose 45.6% in January–June, then lost 12.1% from July 1 through October 22, while software shares fell 19.9% in the first period and gained 32.3% in the second. The lesson is to distinguish a change in market leadership from a collapse in the investment case for technology.
Participation is broadening. Bespoke reports that 56.8% of S&P 500 constituents were above their 50-day moving averages, and UBS reports that on October 22, two-thirds of S&P 500 stocks advanced even as the Nasdaq fell 2.6%. Early earnings are constructive as well: Bespoke counts roughly 72% of initial reporters beating EPS expectations, though only 63% topped revenue estimates.
Higher rates cut both ways. The 10-year Treasury yield fell to roughly 4.95% on October 22 after reaching substantially higher levels earlier in the month, and September inflation ran at 3.7%. For income-oriented portfolios, current yields make quality bonds more competitive — but credit selection still matters.
Continue reading the full October commentary — including why AI investment will face closer scrutiny, four portfolio priorities to consider, and what the firm is watching next.
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