With the Dow and S&P 500 at records and the Nasdaq still shy of its June high, Rand Swiss Senior Market Analyst Shaun Murison tells MarketFramework why U.S. equities have split three ways and what would have to change for the growth complex to retake the lead.
U.S. equities enter the back-half of 2026 pulling in different directions. The Dow and S&P 500 have printed fresh records, while the Nasdaq, dragged by the AI and mega-cap growth names that dominate it, is still working back toward its June peak.
To make sense of the split, and what breaks it, we put the question to Shaun Murison, Senior Market Analyst at wealth manager Rand Swiss.
A Market Split Three Ways
Murison sees a tape where leadership has rotated decisively away from growth. “Cyclicals, industrials and value-tilted Dow components have led the record-setting, while the AI/mega-cap growth complex that dominates the Nasdaq is still recovering credibility after a volatile period,” he says.
He points to three big forces driving the market right now, all of them connected: the war, what the Federal Reserve does with interest rates, and whether the huge sums being spent on AI will actually pay off, what he calls “its integrated nature, and whether there is true feasibility in the ROI amidst incredible Capex spend.” None of it can be separated out. “Of course these themes are interlinked,” he stresses.
What Would Put Tech Back On Top
For the Nasdaq to lead again, Murison says three things need to fall into place at once: the fighting has to ease, inflation has to cool, and the Fed has to look less likely to raise interest rates. “For Nasdaq to return to outperformance the goldilocks scenario becomes peace, a lower inflation threat and in turn less hawkish looking Federal Reserve,” he explains. "The AI, semiconductor, hyperscaler related counters will lead in this environment as they are primed and priced for growth.”
If those things don’t happen, he expects the current pattern to continue, with the older, steadier companies staying ahead of tech. “Outside of this hopeful environment we would expect the relative outperformance of the Dow to continue, with cyclicals, industrials and value / defensive counters preferred over the tech growth theme.” And the S&P 500 tends to land somewhere in between either way: “The S&P 500 performance is likely to sit in the middle of the Nasdaq and Dow in both scenarios.”
The Fed Calls the Shots
If any one thing sets the tone, it’s the Federal Reserve and Murison thinks the chance of another rate rise has faded. Prices are still climbing faster than the Fed would like, but the big cost spike many feared from the war hasn’t arrived. “There hasn’t been a blowout like many thought the war would induce,” he notes, “especially when we consider what happened in COVID era where supply chains broke and costs of goods skyrocketed.”
With hiring slowing and the economy losing steam, he thinks the Fed will likely hold off on raising rates until late in the year, if it moves at all. “When we add the recent deterioration in the jobs market and slowing GDP from Q1 to Q2 there seems to be a very good chance the Fed won’t raise rates until December (if at all).”
The catch, he says, is that no one knows the exact path, because the Fed no longer spells out its plans ahead of time. “Short term the market is repricing for a less hawkish Fed, but the path of rates will remain data dependent without forward guidance from officials, as is the new norm.”
That puts the spotlight on the economic data. Asked what matters most between now and year-end, he keeps it simple: “How and when the Fed moves remains a key driver for markets. So, all the data which feeds those decisions are the primary items on the market catalyst watchlist i.e. Jobs, Inflation, Growth.”
For context, July’s inflation came in about as expected, 3.4% overall, and 2.5% once volatile food and fuel prices are stripped out and the odds of a rate rise in September have since slipped toward “no change” (44%), leaving December as the meeting Murison is watching.
The Good Case and the Bad Case
Murison’s two scenarios are mirror images. In the good case, several things go right at the same time: “Peace, a less hawkish to more dovish Fed and continued growth in AI earnings, coupled with plateau / marginal scaling back of AI spend.” In plain terms, he wants AI companies to keep earning more while easing off on spending, the mix that would justify their high share prices instead of stretching them further.
The bad case is that the same picture flipped: “War escalation and contagion, higher inflation, more aggressive Fed and a disruption in the interlinked AI compute hyperscaler sector which starts a domino effect in earnings decline and investor fear / selling.” Because the big AI companies are so tightly connected, he warns, trouble at one could quickly spread to the rest, pulling profits down and pushing nervous investors to sell.
Murison’s Outlook at a Glance
| Scenario | What Triggers (Shaun Murison) | Who Leads | The Tell to Watch |
|---|---|---|---|
| Bull | The fighting eases, inflation cools and the Fed looks less likely to raise rates — while AI firms keep earning and spend a little less. | Tech leads again. AI, chipmakers and cloud giants out front; the S&P 500 follows. | The Nasdaq starts leading again and climbs back toward its June high |
| Base | None of that lines up. The picture stays mixed and the Fed waits, probably into December | Older, steadier companies keep winning; the S&P 500 lands in the middle. | The Dow stays ahead; tech keeps lagging. |
| Bear | The war spreads, inflation climbs, the Fed turns tougher, or trouble hits the tightly linked AI companies. | Shares fall broadly; tech is hit hardest as the trouble spreads. | Companies cut their profit forecasts; investors pull back and sell. |
What it Means for Traders
Murison’s final piece of advice is about discipline, not prediction: “Don’t bet against market trends, rather find places where you can join them.” In other words, don’t fight the way the market is already moving, look for chances to go with it.
Right now that means the older companies are leading and tech is lagging. Until Murison’s “everything goes right” scenario actually shows up, the safer approach is to trade with that trend and wait for clear proof before betting tech is about to take over again.