Wall Street Strategist: SpaceX Will Force a Major Stock Market Repositioning. Buy These Stocks Instead.

A mega-IPO is about to land in a market already running hot, and one Wall Street strategist sees it as the catalyst that forces investors to broaden their bets. Carol Schleif, Chief Market Strategist at BMO Wealth Management, told CNBC this week that the SpaceX IPO on Friday will pull capital out of the year’s biggest winners as investors bank profits and sideline cash. Her takeaway: rotate into the broadening market, where earnings strength now spans every corner of the S&P 500.

The Concentrated Rally And Why It Looks Vulnerable

Schleif’s starting point is the eye-watering run in mega-cap tech. The NASDAQ is up nearly 30% since April, and chip stocks are up close to 50% over the same window. Performance data backs the scale: the Technology Select Sector SPDR (NYSEARCA:XLK) is up 26.75% from April 10 through June 9, while the NASDAQ-100 tracker Invesco QQQ Trust (NASDAQ:QQQ) has gained 15.83% over that period.

Schleif argues that much of that move reflects crowded positioning rather than fundamentals. When a rally is driven by crowding rather than cash flows, the floor is thinner, and any unexpected headline becomes an excuse to lighten up. “You’ve had a lot of big moves in stocks in particular, especially those leaning into that AI trade, that technology build out the optimism about space. And so using any sort of headline that comes in a little bit unexpected… I think investors can use some of that to bank some profits, sideline some cash, if you will, for those upcoming IPOs.”

SpaceX’s Friday IPO as a Repositioning Catalyst

A mega-IPO is a capital-sourcing event, and investors who want to buy in will need dry powder. The easiest place to find it is in positions sitting on the largest gains. SpaceX’s S-1 disclosed that the company has raised over $9 billion in equity capital since its 2002 founding, with a Connectivity segment that generated $4,423 million in income from operations in 2025 and an AI segment formed through the February 2026 acquisition of xAI. The February 2026 acquisition of xAI is disclosed in the full S-1, and the size of the offering all but guarantees a portfolio reshuffle across institutional books.

Schleif is describing a window in which investors may be locking in gains and raising cash while the volatility backdrop remains manageable. The VIX sits at 19.87, within the normal band but at the 78.7th percentile over the past year.

Where The Broadening Market Shows Up

The recent earnings season extended well beyond AI. Schleif reported that in aggregate, companies saw 11% top-line growth, translating into almost 28% or 29% bottom-line growth this earnings season. Every single one of the 11 S&P sectors had revenue growth, and roughly eight had strong double-digit earnings growth. Nine of 11 sectors were up yesterday, with the equal-weighted index also up, a sign that breadth is improving in real time.

The investor takeaway is that the market rally is broadening beyond a handful of mega-cap technology stocks. One way to see that is through equal-weight and small-cap indexes. Since April 10, the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) has gained 6.38%, while the iShares Russell 2000 ETF (NYSEARCA:IWM) has risen 9.08%. Both have outperformed many investors’ expectations and suggest that more stocks are participating in the market’s advance.

The Real Drivers Ahead: Fundamentals Over Geopolitics

Schleif’s framing is that markets are pivoting away from Middle East headlines, which they have been trying to move beyond for months, and toward concrete catalysts. Her checklist: an inflation report today, another on Friday, and a Fed meeting next week under the new Fed chair, with earnings season five, six weeks away. “Honestly, stock markets don’t have the patience to focus on geopolitics very much. They keep wanting to come back to corporate fundamentals.”