AI buildout is not just benefitting the megacap tech trade, says Charles Schwab's Liz Ann Sonders

• The market's recent activity, including the Nasdaq rebound and chipmaker rally, is seen as a healthy shakeout, not the start of a correction, indicating an easing of overbought conditions.
• The 'tech trade' is broadening beyond mega-cap names, with a significant AI/tech infrastructure buildout benefiting a wider range of companies, including those in the Russell 2000, which has outperformed the S&P 500 year-to-date.
• The Fed is unlikely to cut rates in the near term; instead, a rate hike is more probable by year-end, with market expectations aligning with supportive data on both inflation and the labor market.

Liz Ann Sonders views the recent market dip as a healthy shakeout, not a correction, with a persistent rotational nature across sectors. She highlights a broader AI/tech infrastructure buildout beyond just mega-cap tech and anticipates the Fed's next move will likely be a rate hike rather than a cut, supported by economic data.