The S&P 500 looked like it would continue its malaise this week but after a poor start, it’s turned around nicely.
The index is now at a session high, up 20 points, or 0.3% to 6858. That’s 70 points above the session low from the mid-morning.
Lately we’ve seen some late selloffs so I don’t think this one is over yet but there have been some notable turnarounds. Leading the way is Apple, which is up 3.7%.
This chart has been doing the rounds for a few days and highlights how Apple is sitting out the AI capex race. That’s attractive to investors who think that Apple will ultimately benefit from AI as phones become more indispensable personal assistants.
Apple isn’t exactly cheap though at 30-31x forward earnings and the company hasn’t had much in the way of growth. Revenues fell in 2023 before growing 2% in 2024 and 6.4% in 2025.
Another winner today is the airline sector:
- AAL +4.0%
- UAL +4.3%
- DAL +2.9%
- LUV +7.2%
There is a big rethink ongoing in the sector around the importance of loyalty, airline economics and secular tailwinds behind travel. Most of all, they’re capitalizing on premium travel which is booming and now comprises more than half of United’s revenue. I also think airlines could see some improvement on margins from AI around scheduling and maintenance without facing any risk of disruption. In short, AI is all upside for airlines with no risk of disruption. That’s something the market is looking for right now.
Thirdly, we’re seeing some lift in banks with Citi up 2.8% after some heavy selling last week. I’m not sure if this is any more than a typical bounce but there were some major worries in almost everything last week and banks also stand to be an AI winner in almost any scenario short of mass unemployment and defaults.
Finally, cruise ships are benefitting from some of the same dynamics as airlines but Norwegian (NCLH) is leading the entire S&P 500 with a 12% gain after Elliott took an activist stake.
On the worrisome side, software is continuing to slide with Intuit down another 5% while some of the recently-bid consumer staples give some back.
On the S&P 500 chart, the break below the recent lows early today was worrisome but so far that’s been rejected.
SPX daily
