There's been a big divergence between large-caps and small-caps lately. As shown below, large-cap index ETFs entered today trading in "overbought" territory, solidly above their 50-DMAs. Small-caps and micro-caps, however, have been moving lower and entered today at "oversold" levels. And just as you would expect given where large and small caps are, mid caps are right in the middle in neutral territory!
September was a horrible month for the "average" stock even though the cap-weighted S&P 500 held up fine on the back of mega-caps and big AI infrastructure stocks like the semis.
In the last week or so, however, we've finally seen "average" start to do better than average, while areas like the semis have gotten hit. The price charts below for the semis ETF (SOXX) and the S&P 500 Equal Weight ETF (RSP) highlight this recent rotation.
The biggest and most well-known consumer stocks also had a rough September as interest rates and oil prices rose sharply. These stocks have also bounced back a bit in the last week, as shown in the snapshot from our Trend Analyzer tool below:
"Big software" is another area that has quietly been doing very well in recent months. Below are price charts for six of the most well-known stocks in the Software ETF (IGV). You'd be hard-pressed to find better-looking charts right now outside of the Energy sector.
In the first half of 2026, software was treated like a dead industry group because of the perceived threat of obsolescence from AI. As we said at the time, while some software stocks will likely fall victim to AI, others will adapt and largely benefit from AI implementation. Recent price action for names like Salesforce (CRM), ServiceNow (NOW), and Atlassian (TEAM) shows how quickly narratives can change:
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