Market Rally Broadens Beyond Tech: S&P 500, Russell 2000 Outperform as Sector Rotation Gains Momentum – Jan 19, 2026

The U.S. stock market’s rally is no longer confined to tech giants, with broadening participation across industrial (XLI-US), materials (XLB-US), energy (XLE-US), and consumer staples (XLP-US) sectors, all rising over 5.5% in the past two weeks. The Russell 2000 index has gained 8% year-to-date, outpacing the S&P 500’s 1% rise. Oppenheimer’s chief investment strategist John Stoltzfus attributes the shift to sector rotation, maintaining a bullish 8,100-point target for the S&P 500. Truist Advisory Services has upgraded industrials, healthcare, and energy stocks to “overweight,” recommending diversification amid continued tech exposure. While semiconductor leaders like TSMC (TSM-US), ASML (ASML-US), and AMAT (AMAT-US) rebounded on strong earnings, software firms including Microsoft (MSFT-US), Salesforce (CRM-US), and ServiceNow (NOW-US) declined due to AI-driven disruption risks. Among the megacap tech group, Alphabet (GOOGL-US) rose 6%, Amazon (AMZN-US) up 3%, Nvidia (NVDA-US) nearly flat, while Apple (AAPL-US), Microsoft, Meta (META-US), and Tesla (TSLA-US) posted losses since January 1, 2026. Financials also surged, led by Goldman Sachs (GS-US) and Morgan Stanley (MS-US), which reported their strongest investment banking growth since the pandemic.