July Charts of Interest: The Widespread Influence of AI Spending

Much that has been occurring in the U.S. financial markets has ties to spending on artificial intelligence (AI) infrastructure. It has helped widen leadership in the S&P 500 index, contributed to elevated long-term Treasury yields and generated local resistance to new data center construction. In this month’s charts of interest, we look at those current trends and find out why historical trends give reason to be a little optimistic about the second half of 2026.

As a reminder, the charts of interest highlight charts and tables I’ve come across that haven’t made their way into other AAII commentaries.

More Large-Cap Companies Are Beating the S&P 500

A shift has occurred in the markets: Leadership within the S&P 500 has broadened. Callie Cox of Ritholtz Wealth Management calculated that 47.3% of the stocks within the S&P 500 are beating the index’s performance year to date. This is the largest percentage since the bear market of 2022.

Driving broader leadership has been a shift of investor enthusiasm away from the Magnificent Seven technology giants and into other stocks. Semiconductor and technology hardware stocks have contributed, but so have oil, healthcare services and other stocks.

A Streak We Hope Continues

The S&P 500 stumbled in first-quarter 2026 by falling nearly 5%, before jumping roughly 15% in second-quarter 2026. The sample size of such occurrences is small, but it does suggest that odds for the second half of the year could be in the bull’s favor.

Here is what Jeffrey Hirsch of Stock Trader’s Almanac posted on LinkedIn: “Following a negative Q1, the S&P 500’s track record for the rest of the year is mixed. But when the market rebounds by more than 10% in the second quarter, the historical picture changes dramatically … In the six prior occurrences since 1950—1968, 1980, 2003, 2009, 2020 and 2025—the S&P 500 finished higher in Q3, Q4, the second half and the full year. That’s a perfect 6-for-6 record.”

This Is a Big Year for Stock and Bond Issuances

As of last week, corporations have sold $344.7 billion worth of stock this year, according to The Wall Street Journal. This figure includes big initial public offerings (IPOs) like Space Exploration Technologies Corp. (SPCX), more commonly known as SpaceX, as well as secondary offerings from companies like Alphabet Inc. (GOOGL).

SIFMA Research tabulated $1.52 trillion of corporate debt being issued during the first half of 2026. Spending on data centers by companies like Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) contributed to this large increase.

30-Year Bonds Yields Are Trading Above 5%

The 30-year Treasury bond yields have traded above 5% for most of July, as this chart from Yahoo Finance shows. This is the longest such streak since 2007. Rising government debt is playing a role, but so is the large number of corporate debt issuances.

Source: Yahoo Finance.

Yields on the benchmark 10-year bond—which determine rates for mortgages, among other loans—have been a bit more stable, though they are starting to rise again. Here’s another chart from Yahoo Finance.

Source: Yahoo Finance.

Build That Data Center Somewhere Else

I’ve been seeing posts on my Nextdoor news feed asking for help in opposing the construction of a data center in a village near mine. Nextdoor is a neighborhood-oriented social media platform.

Results of a Redfin survey released yesterday found that more than half (53%) of U.S. residents oppose the construction of an AI data center in their neighborhood. This level of opposition is higher than it is for any other type of building.

More on AAII.com

• The Put-Call Ratio: Viewing Market Sentiment Through Options Activity
  During periods of fear or euphoria, the CBOE equity put-call ratio can inform your judgment by showing where sentiment may have gone too far.

• Using Bond Ladders and Income Annuities for Retirement Income
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• The PRISM Wealth-Building Process: Putting It All Together
  PRISM helps you develop a well-defined personalized plan for achieving your financial goals, as illustrated in the July 2026 AAII Journal.

  
  AAII Sentiment Survey

Optimism among individual investors about the short-term outlook for stocks decreased in the latest AAII Sentiment Survey. Meanwhile, neutral sentiment and pessimism increased.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 15.3 percentage points to 29.6%. Bullish sentiment is below its historical average of 37.5% for the third time in four weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 5.8 percentage points to 28.1%. Neutral sentiment is below its historical average of 31.5% for the 105th time in 107 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 9.5 percentage points to 42.3%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 24th consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 24.8 percentage points to –12.8%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the third time in four weeks.

This week’s special question asked AAII members how they think inflation in the second half of 2026 will compare to inflation in the first half of the year.

Here is how they responded:

• The rate of inflation will be similar to that of the first half of the year: 41.1%

• The rate of inflation will be higher: 31.4%

• The rate of inflation will slow: 23.2%

• Not sure/no opinion: 3.8%

This week’s Sentiment Survey results:

Bullish: 29.6%, down 15.3 points
Neutral: 28.1%, up 5.8 points
Bearish: 42.3%, up 9.5 points

Historical averages:

Bullish: 37.5%
Neutral: 31.5%
Bearish: 31.0%