The stock-market rally isn’t just about tech anymore

Subscribe to enjoy similar stories. Investors are finally showing love to companies outside of the tech sector. Growing economic optimism, along with a more cautious view of the artificial-intelligence build-out, is prompting a major “rotation trade" on Wall Street, with investors selling technology stocks and buying up the shares of most every other type of business.

The shift has only picked up steam in the early days of 2026, pushing the blue chip Dow Jones Industrial Average toward a big 50000-point milestone, even as the tech-heavy Nasdaq composite has struggled for momentum. Thursday’s moves offered one example. Defense stocks rallied after President Trump called for a military budget of $1.5 trillion.

Trump’s proposal, made in a social-media post late Wednesday, was more than $500 billion above what the Pentagon has been expected to get this fiscal year, providing a boost to companies across the defense sector. Among those, L3Harris Technologies gained 5.2%, Lockheed Martin climbed 4.3%, and Northrop Grumman rose 2.4%. That marked a rebound for the stocks, which fell during Wednesday’s session after Trump lashed out at U.S.

weapons manufacturers, threatening to restrict their ability to pay dividends or buy back stock until they produce “a superior product, on time and on budget." He also threatened to halt business with contractor RTX. Shares of the Arlington, Va.-based company, rose 0.8% Thursday. But they remained down slightly for the week, well behind peers such as L3Harris, which is up 7% over that period.

The crosscurrents resulted in a mixed day for major indexes. The Dow climbed 0.6%, or about 270 points, to 49266—just shy of a record set Tuesday. Nine out of the S&P 500’s 11 sectors also rallied.