During the first half of 2026, AI datacenter spending drove strong stock returns of semiconductors, technology hardware and equipment, and capital goods industries (industrials companies that sell electrical and power equipment, machinery, etc.). Those industries contributed 10.7% of the S&P 500 Index’s 10.2% total return (Bloomberg). This means that the aggregate return of the rest of the of companies in the S&P 500 was negative. As the quarter progressed, investors debated the sustainability of AI growth, margins, and stock returns. We address the debate in our Summer Market Outlook based on a foundation of facts.