How AI is reshaping US equity markets

Signs of transformation are emerging in US equity markets amid a torrent of AI-related spending. The shift comes after more than a decade of concentrated gains for market-cap-weighted indices, which, thanks to a narrow group of mega-cap technology stocks, pushed valuations to historic extremes. Investors are increasingly moving into sectors and individual stocks underrepresented in these indices. Dispersion among the stocks that constitute the S&P 500 Index is near multi-decade highs. Previously lagging sectors such as industrials and style factors including value and yield are reasserting leadership...