Small Caps & Retail Traders Drive Markets as AI Rotation Continues

• Russell 2000 hits a new all-time high, outperforming the S&P 500 for 14 consecutive days, indicating a broadening market rally.
• Market leadership is shifting from large-cap tech to small-cap stocks and cyclical sectors like materials and industrials, driven by economic resilience, growth, and the retail 'buy the dip' mentality.
• The AI narrative is evolving from the 'create' (picks and shovels) phase to the 'cultivate' phase, where AI's application across diverse industries is driving productivity and profit margin benefits, further supporting market breadth.

The discussion highlights a broadening market rally, with small-cap stocks outperforming due to economic resilience and growth prospects, rather than solely Fed easing. Leadership is shifting towards cyclical sectors like materials and industrials, and the evolving 'cultivate' phase of AI is driving benefits across various industries, leading to a more dispersed market performance beyond traditional tech giants.