🚀AI Capex Wave Crashes Back Into Hardware
🔎 Weekly Market Highlights May 23, 2026
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Capital rotated decisively back into the AI infrastructure complex this week, with Technology and Communication Services reclaiming leadership after several weeks of mean reversion into defensives.
The catalyst was a hyperscaler capex re-rate following blowout enterprise hardware prints, which forced systematic funds to add gross exposure into Software and AI-adjacent Semiconductors.
Energy stayed bid on tighter inventories, while Utilities held firm on power-demand narratives tied to data center build-out. Defensives (Staples, Health Care) lagged on relative basis as risk-on flows dominated.
Breadth improved meaningfully, with Industrials and Discretionary participating, signaling broadening confidence in the back-half earnings cycle rather than a narrow mega-cap squeeze.
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