Artificial intelligence fears are sending stock market investors back to basics in droves not seen since the 2008 financial crisis-at least by one metric.
Friday's tech sell-off helped set a post-crisis record for October, making it the first month since the depths of the 2008-09 recession that the S&P 500 so badly underperformed its equal-weighted peer. That equal-weighted index counts every constituent the same, instead of using the S&P 500's methodology of giving companies with a larger market value outsize impact.
The last time the equal-weighted index did so well versus the more well-known benchmark was April 2009. Back then, the stock market was rallying after hitting a historic low in March. But investors were still steering clear of the biggest companies by market capitalization, which at the time were Exxon Mobil, Wal-Mart, Microsoft, AT&T and Johnson & Johnson.
At the beginning of last month, the companies in the S&P 500 with the biggest market cap were Nvidia, Apple, Alphabet, Microsoft (the only OG) and Amazon.
But after shares of tech companies plummeted last week amid fears about the ambitiousness of the AI boom, the S&P 500 ended the month down 0.9% while the equal-weighted S&P 500 was up 4.9%.
Bespoke Investment Group, which noted the record discrepancy in a weekend newsletter, pointed out that defensive sectors like consumer staples, energy, health care, and utilities were up more than 9% while tech and communication services both fell more than 8%.
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