Markets drifted sideways in a relatively uneventful session today, with investors digesting recent developments and searching for new catalysts. While broader indices saw subdued action, underlying currents suggest a market grappling with internal divergence—particularly as excitement around artificial intelligence continues to shape sentiment.

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AI-Fueled Tech Giants Keep Markets Afloat

Despite the quiet tape, gains in mega-cap technology stocks provided critical support for the Nasdaq and broader indices. The Nasdaq-100 pushed to fresh all-time highs yesterday, and that momentum carried into today’s session. Nvidia, AMD, and Alphabet were standout performers, with Nvidia surging 3% to yet another record high. Alphabet climbed 2.5%, also extending a recent rally tied to AI enthusiasm and cloud prospects.

The strength in these names underscores the continued investor appetite for AI-linked growth stories. However, this narrow leadership is masking broader market weakness. On the S&P 500, only 130 names finished in the green, while 370 declined—a stark illustration of poor breadth. Essentially, a handful of tech giants are doing most of the heavy lifting.

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Mega-Cap Dispersion Remains a Defining Theme

This pattern of outsized performance by a select few names, while others struggle, has defined the year so far. Once again today, this “Mega 7” dispersion was on full display.

Tesla was the notable laggard, sliding 5% following a mixed investor reaction to the company’s robotaxi launch event. The unveiling, anticipated for months, left markets unconvinced, raising questions about timelines and regulatory clarity.

In contrast, Nvidia’s explosive breakout and Alphabet’s continued rally offered a sharp juxtaposition, highlighting how selectively the market is rewarding perceived innovation and execution in the AI space.

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NYC REITs Under Pressure After Political Surprise

Away from tech, a significant move occurred in a more traditional pocket of the market: New York City-focused real estate investment trusts (REITs). A sharp selloff saw these names tumble over 4% amid rising political uncertainty.

The decline came on the heels of a local electoral surprise, with progressive candidate Zohran Mamdani securing a key win in a mayoral race. Investors are now recalibrating what his potential policy stances might mean for landlords, especially those exposed to NYC’s office and apartment markets.

The swift reaction suggests heightened sensitivity to policy risks in sectors already grappling with post-pandemic dynamics, including hybrid work trends and elevated vacancy rates in commercial real estate.

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Takeaway: A Market of Contrasts

Today’s session encapsulated a market struggling to find direction beyond the dominant AI narrative. On one hand, tech titans continue to hit new highs, feeding momentum and optimism among growth investors. On the other, poor participation across broader equities and rising risks in real estate highlight underlying fragility.

As earnings season approaches and political developments intensify, investors may soon get more clarity. But for now, leadership remains narrow, and the path higher looks increasingly dependent on just a few names continuing to deliver.