Tech and defensive stocks drive split portfolio performance as rate and AI worries deepen

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Tech & defensive portfolio split

Highlights

CrowdStrike surges 19.4% and Meta Platforms jumps 14.4% since September 10 as cybersecurity and AI-related stocks outperform amid growing artificial intelligence concerns.
TJX Companies rises 13% following a post-earnings rebound, with Morgan Stanley attributing weak Q2 demand to broad consumer caution rather than company missteps.
Bank of New York falls 15.4% and Goldman Sachs drops 13.8% as Fed rate hikes raise bank funding concerns, while FedEx Freight slumps 12.4% on higher fuel costs and Boeing declines 9.8% on aerospace worries.

Portfolio winners and losers since September

As reported by CNBC, the divergence across the market has intensified in recent days as investors weigh the durability of the AI trade, the prospect of at least one more Federal Reserve rate hike before year-end and the impact of higher borrowing costs on corporate spending.

By Wednesday's close, the Nasdaq is down 2.5% for the week while the less tech-exposed Dow Jones Industrial Average is flat since last Friday's close. Over the longer stretch from the Sept. 10 meeting through Wednesday, however, the Nasdaq is still up 2.3% while the Dow is down nearly 1%, underscoring how uneven leadership remains.

CrowdStrike is the biggest winner in the portfolio over that period, up 19.4%, as cybersecurity stocks benefit from rising concern over risks linked to more powerful artificial intelligence models. The move is also supported by calls for slower frontier AI development, reinforcing the view that companies will need to keep spending to protect networks and data.

Meta Platforms gains 14.4% as investors respond more positively to the company's AI investment strategy. Momentum builds after the Sept. 8 launch of its Muse personal AI agent and continues with the release of Muse Wonder and Muse Wonder Full, which Wells Fargo says reaches the AI frontier and could help open new revenue streams beyond advertising.

TJX Companies rises 13% as the off-price retailer rebounds from a sell-off that followed weak August earnings and pressure on consumer stocks. A recent Morgan Stanley survey suggests softer second-quarter demand reflects cautious consumer spending more than company-specific execution issues, supporting the case for TJX's value-focused retail model.

Rate pressure and fuel costs weigh on laggards

Bank of New York, down 15.4%, and Goldman Sachs, down 13.8%, are among the weakest performers as the Fed's first rate hike in three years sharpens concerns about bank funding costs, loan demand and capital markets activity. Even with solid earnings from Goldman and better-than-expected fee growth at BNY, the sector remains under pressure as investors reassess the operating backdrop.

FedEx Freight falls 12.4% as the ongoing Iran war pushes diesel prices higher and weighs on transport stocks more broadly. The iShares Transportation ETF is down 3% over the same period, while J.B. Hunt drops 13%, highlighting how fuel inflation is pressuring freight operators and clouding the near-term demand outlook.

Boeing declines 9.8% amid rising fuel prices, wider aerospace sector concerns and a software issue affecting certain 737 Max aircraft. The company says the glitch could affect some landing procedures, although the Federal Aviation Administration determines on Oct. 2 that the issue does not pose a flight-safety concern, easing one potential obstacle to certification of the 737 Max 10.

In our earlier article on the surge in cybersecurity funding, we explained that Q3 saw a sharp rise in capital raised mainly because of larger late-stage rounds, even as the number of deals declined. We also highlighted how AI-oriented and identity-security startups led fundraising momentum, alongside an active M&A backdrop that signaled sustained demand for cyber defenses as AI-related risks accelerate.

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