Stock Market Dynamics

Market preferences turned on a dime in October as skepticism about AI profitability intensified. The wobble at the top of the market didn’t translate to a washout, however, as the correlation of returns across various segments of equities remained low. Defensive stocks found a strong bid as investors turned to long-forgotten, low volatility names and the index’s rank-and-file. The resulting 6% monthly return gap between the cap-weighted and equal-weighted measures was the largest since April 2009.