Investors showing a 'more discerning pallet', says Schwab's Liz Ann Sonders

• Market broadening is evident, with small caps outperforming the S&P 500, indicating a healthier underlying market.
• Significant dispersion within mega-cap tech, exemplified by Meta Platforms being up 10% while Microsoft was down 10% on the day.
• Investors are showing a 'more discerning palate,' leading to lower correlations and rotational corrections within the market, which is considered a healthy backdrop.
• Expect continued rotation and better performance from stocks 'under the surface' of cap-weighted indexes, suggesting a shift from concentrated leadership.

Liz Ann Sonders discusses the current market dynamics, highlighting a healthy broadening of market participation beyond the 'Magnificent Seven' and a 'more discerning palate' among investors. She views recent pullbacks in some mega-cap tech stocks as part of a beneficial rotational correction rather than a broader market downturn, with opportunities emerging in other areas.