Core Insights - Wall Street is experiencing a "Great Rotation," with investors moving away from high-flying technology stocks towards smaller companies and defensive sectors due to factors like "AI capex fatigue," a resilient U.S. economy, and expectations of a less-dovish Federal Reserve [1][3][10] Investment Trends - The five largest U.S. cloud and AI infrastructure providers, including Microsoft, Alphabet, Amazon, Meta, and Oracle, are projected to spend between $660 billion and $690 billion in capital expenditures by 2026, nearly doubling the spending levels of 2025 [2] - Pure-play AI companies like OpenAI and Anthropic are experiencing strong revenue growth, but their combined revenues do not match the significant infrastructure investments made in them [2] Market Performance - Approximately 65% of S&P 500 stocks are outperforming the index, indicating a broadening market breadth not seen in years, suggesting leadership is expanding beyond just mega-cap tech [4][10] - The State Street SPDR Portfolio S&P 500 Value ETF (SPYV) has increased by about 1.1% over the past month, while the State Street SPDR S&P 500 ETF Trust (SPY) has declined by 1.8% during the same period [5] Sector-Specific ETFs - The State Street Consumer Staples Select Sector SPDR Fund (XLP) has gained about 10% over the past month and 9.6% over the past year, indicating strong performance in non-cyclical sectors [6] - The First Trust Utilities AlphaDEX Fund (FXU) has risen by 7.8% in the past month and 22.9% over the past year, benefiting from the demand for utilities amid the AI boom [7] - The Vanguard High Dividend Yield ETF (VYM) has added approximately 4.7% over the past month, with an annual yield of 2.24%, appealing to investors seeking income in a volatile market [8] Small-Cap Performance - Small-cap stocks have outperformed large-cap stocks this year, supported by a domestic focus, dollar strength, and an improving earnings outlook, with the S&P SmallCap 600 index expected to return to positive growth in 2025 [11]