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Culture · Apr 22, 2026

Beneath calm S&P 500 surface, extreme stock volatility emerges as AI and geopolitics reshape investor behavior

While the broad index has fallen only 3% year-to-date, analysis from Bespoke Investment Group reveals stark divergence: 57 stocks up 20% or more, 47 down by the same amount, driven by shifts away from software and toward defense and semiconductor plays.

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TL;DR
  • The S&P 500 has declined 3% this year, but underlying volatility is extreme: 57 stocks gained at least 20% while 47 fell at least 20%, according to Bespoke Investment Group analysis from mid-March 2026.
  • Energy and defense stocks have surged (Valero +43%, Occidental Petroleum +40%, Lockheed Martin +34%) while software firms have collapsed (Workday -39%, Salesforce -27%, Oracle -20%).
  • Semiconductor companies including SanDisk (+168%) and Micron (+48%) have benefited from memory chip shortages, bucking the software decline.
  • The Magnificent 7 mega-cap stocks fell only 8%, but represent 40% of the S&P 500's weight—their underperformance acts as a market drag despite relative stability.
  • JPMorgan strategist Abby Yoder noted software began recovering in the first week of the war as attention shifted from AI to geopolitics, suggesting the rotation may be reversing.

The S&P 500's modest 3% decline masks extraordinary volatility beneath aggregate headline figures. Bespoke Investment Group's analysis on March 13, 2026, identified 57 stocks with gains exceeding 20% and 47 with losses of the same magnitude—a distribution Bespoke cofounder Paul Hickey characterized as unusual.

Sectoral rotation has been sharp. Energy and defense holdings have captured capital flight from technology: Valero Energy rose 43%, Occidental Petroleum 40%, and Lockheed Martin 34%. Conversely, software companies have suffered sustained selling pressure. Workday fell 39%, Salesforce 27%, and Oracle 20%, reflecting investor skepticism toward previously favored tech positions.

Semiconductor stocks have defied broader technology weakness. SanDisk gained 168% year-to-date while Micron advanced 48%, supported by memory and RAM chip supply constraints that have lifted component makers while weighing on software margins.

The concentration problem remains acute. The Magnificent 7 stocks fell 8% year-to-date but constitute roughly 40% of the index's weight, creating a drag effect on the broader benchmark. JPMorgan Private Bank strategist Abby Yoder indicated this dynamic may be shifting: software performed better during the first week of the conflict as attention pivoted from artificial intelligence to geopolitics, suggesting investor focus could be rotating away from AI hype.

Sources
  1. 01Axios — The stock market looks wild under the surface
  2. 02Bespoke Investment Group — S&P 500 volatility analysis
  3. 03JPMorgan Private Bank — U.S. equity strategy commentary
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