Sector Rotation: Geopolitical Shock, Oil Spike, AI Selloff

Oil above $100 and AI spending shock triggered sharp selloff. S&P 500 closed at 7,408. Mag 7 underperforming; Citi declares 'Mag 7 is dead.' Rotation into value/defensive continues. Energy up on oil spike, then crashed on ceasefire. Semiconductors under pressure. Market breadth improving: Mag 7 -2%, other 493 +10.2%. Small caps outperforming. New 2x equal-weight Nasdaq-100 ETF (EQQQ) launched. Correction risk rising with momentum factor collapsing, but equal-weight and small-caps holding up. Latest: Intel leads early bounce, Amkor/Nvidia deal signals AI demand broadening. Credit spread widening and real yield surge add macro pressure. AI trade blowup but broader market stable as institutions rotate into financials/industrials. Industrials sector P/E above 30, driven by AI infrastructure spending, raising valuation risk. Liquidity headwinds building: $120B T-bill drain and dispersion trade fading, narrowing dispersion-correlation gap could pressure S&P 500. Nasdaq slipped 2% for the week, while Dow and S&P recovered modestly. Oil plunge shifts energy sector dynamics.