U.S. Market Enters Selection Phase: Technology Dominance Declines as Energy, Metals, and Gold Strengthen

Published: May 3, 2026
A recent video on Schwab Network highlights a clear divergence in the U.S. market. While the Mag 7 stocks continue to lead the gains, most of the S&P 500 lag behind, with about 45% to 55% of companies remaining in negative territory throughout the year.
According to guest Patrick Muller, this trend reflects that the current rally is not as broad-based as it appears. Instead, the rally heavily depends on a small number of stocks related to Artificial Intelligence (AI).
Inflation and Energy Pressures
The discussion also covers the impact of rising oil prices on the market. Muller notes that ongoing events in the Middle East add a new layer of risk and trigger inflation concerns.
He further points out that fuel prices directly affect consumers, impacting daily spending and overall costs of goods and services. In this context, he observes that the Federal Reserve typically lags behind market developments, and its ability to take decisive action will remain limited until geopolitical tensions become clearer.
AI: Hype vs. Reality
Muller explains that capital flows are still aggressively directed toward AI, especially in the semiconductor sector. However, he notes a slow transition from hype to real earnings.
This shift is prompting investors to redirect funds into other assets and sectors, such as infrastructure, energy, and precious metals.
Defense Opportunities
Unlike the volatility seen in tech stocks, the video shows a growing trend toward defensive assets, particularly gold and silver.
Muller states that gold remains attractive in an environment filled with fear and uncertainty, while silver seems poised to benefit from industrial demand related to electric vehicles (EVs) and solar energy.
The discussion also highlights a shift away from a sole focus on growth stocks, with investors seeking more conservative instruments like fixed income and funds that benefit from re-industrialization within the United States.
What Does This Mean?
The key takeaway is that the U.S. market is no longer moving in a single rhythm. The market is entering a selection phase, distinguishing between leading rally stocks and laggards.
If strong earnings continue to support mega-cap companies, the rally may persist. However, if earnings are missed by market leaders, it could pave the way for a broader correction. Meanwhile, energy, metals, and defensive assets stand out as the main beneficiaries of current anxieties, leaving investors with a more selective market that relies less solely on the AI narrative.