Stock Market Today: Rotation Away From AI Stocks Increases as Money Flows to AI Landlords
The S&P 500 looks flat before the bell, but a split is tearing through the market. After voters took aim at data centers, one group of AI winners is surging while the companies that supply them slide. The Fed speaks…
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The S&P 500 is headed for a near-flat start Thursday. As of about 8:20 a.m. ET, funds that track the index were up 0.1% before the bell. Under that calm number, the S&P 500 is splitting in two. Hyperscalers and Apple (NASDAQ:AAPL | AAPL Price Prediction) are adding to Wednesday’s post-election rally, while chipmakers are falling on concerns that voters just made AI data centers harder to build. The biggest scheduled event of the day is the Federal Reserve’s policy statement at 2 p.m. ET.
| Index | Premarket Read (Fund Proxy) |
|---|---|
| S&P 500 | +0.1% |
| Nasdaq-100 (Composite proxy) | -0.8% |
| Dow Jones | +0.7% |
| Russell 2000 | +0.2% |
| VIX (Tuesday close) | 21 |
Voters Turned on Data Centers, and Chip Stocks Are Paying for It
On Tuesday, Democrats flipped both the House and Senate. Voters also sided against AI data centers in 40 of 41 local ballot measures, according to CNBC. Investors took that to mean the AI expansion will be slower and more expensive. That outcome helps the companies that already own data centers and hurts the ones selling them chips.
Amazon (NASDAQ:AMZN) jumped 8% Wednesday and is up another 2% premarket. Apple rose nearly 7% Wednesday and is adding 1%.
Apple trades near $354. Because the Dow is price-weighted, a stock with a share price that high has extra pull on the index. This is why the Dow leads this morning.
NVIDIA (NASDAQ:NVDA) is down 2% premarket, adding to an 18% drop over the past month. Intel (NASDAQ:INTC) is off 3% and has lost 51% in a month.
The leveraged Direxion Daily Semiconductor Bull 3X ETF (NYSEARCA:SOXL) is indicated down 11%. The fund resets every day to deliver triple the chip index’s move, so losses pile up fast when chips keep falling.
Money Is Rotating Toward AI Landlords
While the Dow rises, the Nasdaq-100 proxy is falling. That gap shows money moving away from chip suppliers and toward blue chips and companies that already own AI capacity (we featured seven suppliers behind the data center expansion, from power to cooling, in a free report you can grab here). Needham analyst Laura Martin summed it up: “Hyperscalers are AI incumbents.” Siebert Financial’s Mark Malek pointed to where the risk lies: “The most vulnerable AI companies are the borrowers, not necessarily the biggest spenders.”
Wall Street’s concerns gauge, the VIX, is almost 21. That puts it in elevated territory, up 3 points from a week earlier. The 10-year Treasury yield is just under 5%, which keeps borrowing costs high for the rate-sensitive small caps in the Russell 2000.
Fed Statement Sets the Afternoon Tone
The top of the Fed’s target range is 4% going into today’s announcement. Any hint about future rate cuts will likely move small caps and high-valuation tech the most. Through the session, keep an eye on whether chip stocks steady as investors work out how far state-level limits on data centers can actually reach.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
