Mega-Rotation Could Be Biggest Since Post-Pandemic
Mega-rotation out of Big Tech is going to be a major theme for investors for the rest of 2026, predicts the CEO of one of the world's largest independent financial advisory organisations.
The prediction from deVere Group's Nigel Green comes as investors accelerate a broad shift away from concentrated positions in mega-cap technology stocks and into financials, industrials, healthcare, energy, infrastructure and value sectors, following softer-than-expected US jobs data and growing evidence that market leadership is widening.
The S&P 500 Equal Weight Index is enjoying its strongest relative start to a year since 1992, while equal-weight US equities have outperformed their market-cap weighted counterparts in recent months, highlighting a major broadening of participation beyond the largest technology stocks. The shift comes as the Dow Jones Industrial Average notched its second record closing high last week, rising above 52,900 as investors rotated into economically sensitive sectors while reducing exposure to parts of the technology and semiconductor complex.
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The shift accelerated after the latest US employment report showed the economy added just 57,000 jobs in June, roughly half of consensus expectations, while previous months were revised lower.
Markets responded by sharply reducing expectations of further Federal Reserve tightening, with investors increasingly betting that the Fed will remain on hold as labour market momentum cools. The shift in interest rate expectations has helped fuel renewed interest in sectors that have lagged the AI-led rally and stand to benefit from a more stable monetary environment.
The deVere CEO continues:
Wall Street strategists have increasingly described the current environment as a major rotation trade, with capital flowing into cyclical and value-oriented sectors after years of extreme technology dominance.
Recent weakness in momentum-driven semiconductor trades has further strengthened expectations that broader market participation could become a defining feature of the second half of the year.
Nigel Green explains:
He concludes:
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