Morning Brief AI rotation call, commodities rip higher, deal chatter drives tickers
US stocks were little changed on the holiday-shortened session after the S&P 500 closed at a record, with investors tracking the Santa Claus rally window into early January. Commodity strength stayed a key backdrop, keeping inflation and rate expectations in focus as traders look ahead to 2026 policy signals.
Strategists argued the AI trade still matters, but leadership may broaden from “AI cost centers” to “AI beneficiaries,” as adoption lifts productivity and margins beyond megacap tech. They also flagged potential 2026 rotation across sectors and styles, including equal-weight exposure as mega-cap earnings growth cools.
On the macro tape, the panel pointed to resilient consumer spending led by higher-income households, with liquidity conditions, wage gains, and productivity trends shaping the 2026 rates path. Dividend payers and healthcare were framed as under-owned areas that could re-rate if cash yields fade with Fed cuts.
Trending: BP (BP) in a $10.1B lubricants JV deal, Sanofi (SNY) to buy Dynavax (DVAX), and UiPath (PATH) added to the S&P MidCap 400.
Takeaways:
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Markets are in Santa-rally watch mode after a record S&P 500 close.
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Investors are debating AI leaders vs. the next wave of AI adopters.
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Rotation and diversification are the core 2026 positioning call.
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Consumer resilience and productivity are the key macro swing factors.
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Deal news and index inclusion are moving single-name action.
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