The market is starting to broaden.

For most of the past year, the market was obsessed with the same group of AI infrastructure winners: semiconductors, data centers, power, memory, networking, cooling, and the picks and shovels.

Before AI can change the world, the world first needs to build the physical infrastructure that makes AI possible.

But now the trade is starting to spread, and capital is starting to rotate into new areas.

Healthcare, biotech, fintech, robotics, software, industrials, and other areas that were largely ignored are starting to wake up. Real-world AI use cases are expanding fast. That means more companies, more sectors, and more business models are starting to feel the downstream impact.

So while the S&P fell 2% last week, a few sectors stood out.

One of the strongest groups in the market right now is biotech.

Healthcare and biotech could see one of the most consequential impacts from AI. Drug discovery, disease detection, patient selection, treatment design, clinical trials, and personalized medicine are all being enhanced by AI. AI has the potential to change how we understand disease, how we develop therapies, and how patients are treated.

This is not a small theme.

That is why biotech deserves to be a top-tier focus going forward. The tailwinds are massive.

So make sure to check out the new Biotech theme.

June is almost over.

Historically, June has been the second-worst month of the year on a median basis, only behind September.

The good news is that we are now entering one of the strongest months of the year.

July has historically been the best month for the market over the past 100 years. Of course, that does not mean stocks have to go up, but it does mean seasonality is starting to turning into a tailwind.

And it looks like we might close June in the red.

Historically, when June has been down, July has been up 10 out of 12 times, with an average gain of almost 3%.

Here’s where we are right now from a seasonality perspective.

Of course, this should only be used as rough guidance. Seasonality can help frame expectations, but it should not used as the only indicator.

June has been weak, July has historically been strong, and then the market usually enters a more difficult stretch later in the summer and into September.

The base case right now would be a near-term rally into July, followed by a longer consolidation phase into the fall.

One of the most interesting divergences in the market right now is the rotation of capital from Big Tech into small caps.

The Mag 7 are down 6% year to date, while small caps are on track for their best year since 1991. And it looks like small caps may just be getting started.

The relative weakness is historic, with the Mag 7 now hitting new 52-week lows relative to the S&P 500, which shows how much leadership has shifted away from the same mega-cap technology names that dominated the market for years.

If this holds, it would mark only the second time in the past decade that the broader market has outperformed the Magnificent 7, and even more interestingly, the first time this happened during a year when the market itself was positive.

This divergence is worth keeping an eye on. Eventually, it will create great opportunities, but that moment is not right now.

The price trajectory of Bitcoin has been brutal.

It is down more than 50% from its peak last October, down more than 30% on the year, and now sitting right around $60,000.

It’s a good example that just because something is down a lot does not automatically make it a buying opportunity. I’d much rather focus on strength, not weakness. You never know how long a correction lasts.

The market is changing and forcing people to adjust.

The straight-up AI infrastructure trade that dominated from April through early June has paused for now. That does not mean the trade is over. It means these stocks had historic moves, and now they likely need time to digest and reset. That is completely normal.

Reality is, money is clearly rotating elsewhere. Small caps continue to outperform, biotech and healthcare are acting like some of the strongest groups in the market, fintech is heating up, and even the Dow is making new highs. They all pointing in the same direction.

This market is broadening.

The opportunity is no longer only in semiconductors and AI infrastructure. Those groups still work, but they are not the only game in town anymore.

The market has spent nearly 2 months consolidating after a historic move off the lows. This is far from bearish. It is healthy for markets. Until leading groups start breaking down across the board, or the broadening starts to fade, pullbacks and consolidations remain opportunities.

This is still a bull market. It is just no longer the same narrow bull market it was a few months ago. The market still looks constructive. But there are a few divergences that it makes sense to stay careful, selective, and cautiously optimistic.

Hence, I’ll be highlighting more names from different sectors that are are setting up right now.