It was a great session yesterday if you had exposure to Artificial Intelligence (Al) in your portfolio.  Among the top ten advancers, nine names in four sectors are tied to the explosive growth of AI.

Technology (XLK):

• Oracle Corp (ORCL)
• Broadcom (AVGO)
• Arista Networks (ANET)

Utilities (XLU):

• Vistra Corp (VST)
• Constellation Energy (CEG)
• NRG Energy (NRG)

Real Estate (XLRE):

• Digital Realty Trust (DLR)

Industrials (XLI):

• GE Vernova (GEV)
• Quanta Services (PWR)

This is something to see and marvel at, because I think we have to go back to the 1800s, when railroad stocks were at their peak, to find anything remotely like this.  While valuations are high, it's tough to argue that the cash being invested now has potential for returns unheard of in market history.

AI continues to grow as a percentage of the total market capitalization. According to JPMorgan, 30 AI stocks in the S&P 500 have a combined market cap of nearly $60 trillion, which accounts for 43% of the total. I think more stocks are under this halo, so that the market could be at 50%.

Meanwhile, “Mag Seven” continues to set new highs with a surging money flow index (MFI).

Lackluster Record for S&P 500

The advance-decline line is moving in the wrong direction on the S&P 500, but all the action is on the NASDAQ Composite, which enjoyed a surge in names changing hands at new 52-week highs.

Market Breadth	NYSE	NASDAQ
Advancers	1,417	2,107
Decliners	1,342	2,443
New Highs	144	336
New Lows	35	78
Up Volume	2.01 billion	5.08 billion
Down Volume	2.24 billion	3.10 billion

Never Forget

Today’s Session

Initial jobless claims came in at 263,000 against consensus of 234,000, this is big economic news this morning.  Continuing claims edged lower which is good, but there is no denying the labor market is in trouble.

Initial Jobless Claims

This adds serious pressure on the Federal Reserve which is woefully behind.

Consumer Price Index

CPI is +2.9% from a year ago and is in line with expectations. There are uncomfortable parts of the report, like the month to month climb on food at home and spike in used cars, but it still not living up to the fearmongering about tariffs.

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