If in 2025 investors bought every S&P 500 dip, in 2026, they're looking at lofty corporate results with skepticism. FactSet data show 94% of S&P 500 companies have reported Q4 results; earnings are up about 15% — the fifth consecutive quarter of double-digit growth — and revenue jumped by 9.5%. Despite these impressive numbers, the broad index rose by less than 1%.

A telling example was the reaction to NVIDIA's blockbuster Q4 print: instead of rallying, the stock fell by about 5.5%, wiping roughly $259bn off its market cap. That's the seventh-largest one-day drawdown in US equity market history and the fifth such decline for NVIDIA.

NVIDIA share dynamics

The reaction underlined two things: first, investor anxiety about AI's economic and market impact has not gone away; second, the bar for tech giants is so high that even stellar reports can fail to lift their shares.

It is no surprise that demand for downside insurance on the S&P 500 is booming. Strategists, by contrast, remain bullish on the broad index and still advise buying pullbacks. These opposing forces have kept the US equity market in a relatively tight range for months.

That consolidation is making the market boring — especially versus competitors. Respondents to the MLIV Pulse survey reckon Asian markets will be the biggest beneficiaries of Donald Trump's new tariffs. Indeed, the MSCI Asia-Pacific index rose by about 7% in February, marking its best February since inception in 1998.

MSCI Asia-Pacific index dynamics

South Korea's KOSPI is the standout: +20% in February and +48% year-to-date — an impressive run. It confirms that where US AI leadership fades, an Asian oasis has emerged. South Korea is being viewed as a hub for AI hardware and technology.

So fears about AI's economic impact have not gone away, and regional rotation continues. Investors are pulling money out of the US and redeploying capital into Asia, mostly into South Korea. How can the broad US equity index grow in this environment?

Technically, the S&P 500 failed a test of fair value at 6,940 on the daily chart, signaling bull weakness. The ongoing consolidation argues for staying out of the market or placing staggered limit orders — buy the index at 7,000, sell at 6,800. Aggressive long positions could be considered at 6,940 and 6,840.