Wall Street investors chase cheaper, smaller companies as risk aversion hits tech sector

Market Trends - The selloff in major tech stocks has paused, leading to aggressive buying in different sectors, particularly smaller companies [1][10] - The S&P 500 rose by 1.78% and the Nasdaq 100 by nearly 2%, while the Russell 2000 index surged by 3.5% [1][10] - Investors are shifting focus from megacap technology stocks to industrial, healthcare, and smallcap companies, indicating a broadening market rally [2][10] Investment Strategies - Investors are reassessing risk and moving away from crowded trades, leading to increased interest in dividend growth and equal-weighted indexes [5][10] - Defensive stocks are gaining traction, reflecting a shift away from speculative assets [7][10] - Money is quietly moving into economically sensitive sectors such as energy, materials, staples, and industrials, which have shown double-digit gains year-to-date [8][10] Concerns and Volatility - There are doubts regarding the profitability of AI hyperscalers like Amazon, Microsoft, and Alphabet, particularly concerning their capital spending plans [6][10] - The iShares Expanded Technology Software ETF rebounded by 3.5% but ended the week down 9.1%, indicating ongoing volatility and uncertainty in tech stocks [6][10] - The market is experiencing significant intraday volatility as investors seek stability amid shifting sentiments [6][10]