Stocks look split in two: the big AI names are at record highs while most other stocks are falling, and the bull case says this gap is about to close in investors' favor.

• The equal-weight S&P 500 is down seven weeks straight, the worst run since 2022 and 2002 — both of which turned out to be market bottoms.
• Four shocks hit at once: expensive oil, rising interest rates, higher corporate borrowing costs, and the AI spending boom.
• Those shocks already look priced in — oil has slipped back under $100 and bets on more Fed rate hikes are coming down.
• Small companies, utilities, and banks are getting hurt most, since high government bond yields make their dividends and deposits look unattractive.
• Wall Street firms and tech billionaires are raking in money underwriting the AI buildout, with the 100 richest tech fortunes up $845 billion this year.

Outlook: If oil and interest rates keep easing, the rally should broaden beyond AI stocks and push the Nasdaq to fresh highs by year end.