Market rotation: Investors are selling 21st century 'innovators' to buy 19th century businesses

February 9, 2026

TL;DR

The S&P 500 showed resilience with a 1.3% gain in the first five weeks, influenced by market fortune and investor inflows.
There's a significant rotation from 21st-century 'innovators' (technology) to 19th-century businesses (asset-heavy producers).
The Dow Jones Industrial Average has seen significant gains, with Caterpillar contributing substantially, while tech stalwarts like Microsoft and Salesforce have seen declines.
Energy and railroad sectors are performing well, along with agricultural-product companies like Bunge and Archer-Daniels-Midland.
Investors are moving money out of tech and crypto funds into non-tech sector funds at a record pace.
Software companies are particularly vulnerable due to AI disruption concerns, impacting their valuations and the 'LBO bid' cushion.
Market extremes include outperformance of semiconductors over software and multi-decade highs in silver-over-gold prices.
The market has experienced internal volatility without a significant overall drawdown, indicating a form of 'lucky break'.
External factors like overseas revenue growth and a strong capital-spending boom are supporting the economy.
Questions remain about whether current rotational trends can continue without negative breaks and how much of the positive outlook is already priced in.

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