View the video of this post here.
Next Wednesday (11/18) at 2 PM ET, I’ll be joining YCharts for a live webinar: The Charts That Matter Now.
With inflation remaining stubbornly high, Treasury yields at their highest levels in over two decades, and AI capital spending reaching unprecedented heights, investors have no shortage of things to worry about.
We’ll take a data-driven look at where markets stand today, what’s driving the biggest trends, and what investors should be watching as we head into 2027.
Register HERE to reserve your spot.
The most important charts and themes in markets and investing…
1) The Market’s Reality Check
The S&P 500 fell 4.4% last Thursday, its biggest one-day decline since the tariff turmoil in April 2025.
At the same time, the Volatility Index (VIX) surged 70%, its third-largest one-day percentage increase in history (note: VIX data goes back to 1990).
The Nasdaq Composite fell 5.5%, losing a staggering $2.49 trillion in market capitalization. This was the largest one-day dollar decline in its history.
After months of low volatility, investors are getting a reminder that stocks don’t go up in a straight line.
Since its October 6 peak, the S&P 500 has declined 6.3%, marking the 34th correction of 5% or more since the March 2009 low.
Every single one of those corrections came with scary headlines and a seemingly compelling reason to sell.
And yet, the S&P 500 is up over 1,400% since the March 2009 low (including dividends).
The lesson: You don’t build wealth by avoiding corrections. You build wealth by enduring them.
2) A Major Shift in Market Leadership
One of the biggest stories in markets this year has been the dramatic reversal in leadership between growth and value stocks.
Through November 5, the Russell 1000 Value Index had gained 24.3% in 2026, while the Russell 1000 Growth Index had declined 6.4%.
That’s a staggering 30.7 percentage-point advantage for value stocks.
If the year ended today, it would be a record spread, even wider than what occurred in 2000 when the Dot-Com Bubble burst.
This is a major departure from the previous decade, when growth stocks, particularly the largest technology companies, dominated market returns.
3) The Semiconductor Sell-off
The shift in market leadership isn’t limited to growth versus value.
In late June, semiconductor stocks ($SOXX ETF) were outperforming the broad market ($SPY ETF) by over 100 percentage points on the year.
But after a 40% drawdown, that spread has narrowed to just 23 percentage points.
Data-center construction spending has surged 90% over the past year to a record $96.5 billion. And that has been a major tailwind for semiconductor stocks as they have been the primary beneficiaries of this unprecedented boom.
But voters are increasingly pushing back against the data-center explosion.
In the midterm elections, 46 of the 47 decided ballot measures involving data centers favored limiting development. That’s an incredible 98%.
Five months ago, the market was valuing semiconductors as if the spending boom would never end. Fast forward to today and more people are asking the following question: what happens to semiconductor growth/margins if AI spending begins to slow?
4) The Re-Rating of Big Tech
Big tech is undergoing a fundamental transformation, shifting from asset-light to asset-heavy business models.
CapEx as a % of revenue are all at record highs:
-Meta: 43%
-Microsoft: 39%
-Google: 34%
-Amazon: 27%
Does this shift warrant a re-rating?
Investors seem to think so, with all 4 trading at a lower valuation multiple than a year ago:
- Amazon: 34x to 21x
- Google: 28x to 15x
- Meta: 27x to 21x
- Microsoft: 35x to 28x
5) Live by the Meme, Die by the Meme
All speculative manias tend to follow a familiar pattern.
Prices rise rapidly, attracting more investors who are drawn in by the prospect of “easy money.”
The narrative becomes more exciting, the valuations become more extreme, and the risks are increasingly ignored.
Until the momentum reverses.
We’re seeing yet another example of this in 2026.
The Roundhill Meme Stock ETF ($MEME) surged more than 90% during the first five months of the year as speculative enthusiasm reached a fever pitch.
But those gains have completely evaporated, with the fund now down 17% year-to-date.
The same boom-and-bust behavior is evident in the Roundhill Memory ETF ($DRAM), which became the fastest ETF in history to reach $25 billion in assets, less than two months after launching in April.
The ETF has since declined more than 54% from its peak.
And then there are the individual meme stocks and coins.
Opendoor ($OPEN), which experienced a speculative frenzy from July – September 2025, is now down 95% from its February 2021 peak after reporting continued net losses.
Meanwhile, President Trump’s and Melania Trump’s meme coins have fared even worse, falling 99% form their peak levels…
These are catastrophic losses of capital.
And they highlight one of the most important distinctions in investing.
There’s a big difference between taking intelligent risks and blindly speculating.
Buying something simply because of a funny meme isn’t a long-term investment strategy. Live by the meme, die by the meme.
6) More Rate Hikes Are Coming
68.
As in 68 consecutive months with US inflation above the Fed’s 2% target.
Monetary policy remains far too easy given this backdrop.
The market is now fully pricing in another 25 bps Fed rate hike in December (up to 4.00-4.25%) with more hikes likely in early 2027.
And that’s it for this week. Thanks for reading!
Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.
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