It was a sluggish session yesterday, although the Volatility Index (VIX) climbed 3%; there wasn’t a sense of panic or fear.

S O S

The S&P 500 Communication Services Sector (XLC)  is really taking it on the chin. The sector's average stock is down 26.8% from its 52-week high.

Yesterday, Google (GOOG/L) broke the news that DeepMind's top engineering executive, John Jumper (I can’t make this up), is jumping to Anthropic. The delicious irony is that there are growing concerns the company will never recoup its massive investments in artificial intelligence (AI).

Meta Platforms (META) has also come under the same pressure, if not more, considering this isn’t the first time the Street has had to play hardball with Mark Zuckerberg.

Just about every name in the sector faces exogenous threats.

The AI threat to businesses, like The Trade Desk (TTD), has taken a crushing toll, even after the CEO bought $140 million in the company’s shares.

And some simply need to retool their product. Let's face it, Netflix (NFLX) movies are awful, but then again, Disney (DIS) lost its touch a long time ago.

The S&P 500 (SPX) is holding on to decent year-to-date gains, but there have been very few down years since 2001. Investors get antsy over even the slightest pullbacks.

The S&P 500 is also holding above its moving averages, but money flow is waning, and there are concerns about overall liquidity.

Factors

For most of the session, momentum (SPMO) wasn't much of a factor, but has now become something of a safe haven. As uncertainty mounts, investors are comfortable piling in.

Interestingly, growth was slammed, while value, low-volatility, and quality found buyers.

Mo Knows

I must say momentum has been something to behold. There is a saying that new highs beget new highs, but this is on a whole different level.

Rotation From Tech to Tech

Although many are looking for a mass rotation from large-cap tech into other market niches, most of the action is still in tech.

The hottest stocks in the S&P 500 yesterday were direct or indirect beneficiaries of the AI buildout.  Although there were bigger moves, the pop in Micron Technology (MU) is truly impressive, given that they report this week.

However, the same is true for midcaps, where non-household tech names rule.

Newcomers Welcomed

I want to see the rally broaden out, and that should happen in earnest, as commodity costs begin to ease.

Today’s Session

Lots of pressure on the market at the open. From an array of events, but nothing new. There is no real news worth remembering.

Started in Asia

Each morning, I check Asian markets when I wake up, no longer European ones (I hardly look at them at all).

Kospi

This market has been a beast, but foreign investors have been dumping all year, and recently, Bank of America told clients to sell.

I’m not aware of any real issues fundamentally, but there is so much excitement in Korea over the rise of its market that the declining birth rate had a sharp reversal and saw the biggest one-month surge ever.

At one point overnight, the Korean market (Kospi) was down 13%, which would have been the worst session on record.  The Kospi closed down 9.99% but remains up 90% year to date.

1. -12.06% (March 4, 2026): fears of a U.S.-Iran conflict triggered by Middle East tensions

2. -12.02% (September 12, 2001): right after 9/11

3. -11.63% (April 17, 2000): dot com bubble burst

4. -10.57% (October 24, 2008): global financial crisis

5. -9.99% (June 23, 2026)

Regret

Stock market fever is gripping the nation as 100 million accounts have been opened for a population of 52 million, and there are reports that old folks are selling their life insurance policies to get in the mix.

FOMO

Lots of leverage in Korea’s market as retail investors have loaded up on the 13 leveraged ETFs

Interestingly, as margin balance has surged in Korea, loans' share of the market has plunged. Some of that reverses with a pullback in Korea.

It's not just Korea

In Taiwan, investors are going bonkers over the stock market, too.

Trigger

The emotional stage was set, with any letdown sending newbies running for the exits. That trigger appears to have come from the media.

Local media reports that Hynix may be scaling back on HBMs and focusing on DRAMs, which have lower profit margins, as a selling trigger.

These kinds of reports pop up all the time – I think a lot of it is clickbait.

Not long ago, there was a story that Hynix was scaling back on DRAM to focus on HBMs.

Fundamentals

The money being made in Korea and Taiwan is real and will continue for the foreseeable future

In fact, 2027 bonuses at Hynix are expected to be $900,000 per employee. 

These bonuses are based on business, not share price appreciation.

Earnings

Global earnings are surging this year and should be stronger in 2027.

In the United States, AI-related value has added more than $30.0 trillion to the S&P alone.

Hyperscaler Spending

The SpaceX bond, coupled with other bonds, keeps stoking the argument that these mega-cap investors will not see a return on investment.

I think they are smart enough to know how to make money off these investments.  I’m thrilled we are staying ahead of China on this as well.

There is no need for panic, but it's going to be choppy into Micron’s (MU) results and maybe after.  I’m looking to see how much rotation we get – after all the gains this year have come from AI.

Rotation Due?

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