Welcome to the Everything Rally

Healthy bull markets exhibit strong breadth. 

After chopping around for two months, the S&P 500 hit its 25th all-time high of 2026 last week with broad-based leadership.

That’s a signal to look beyond tech stocks as big rotation boosts the S&P 500.

Don’t abandon tech…just be open to new opportunities.

Earnings momentum is helping tech gets its mojo back after July’s healthy AI positioning reset.

Meanwhile, cyclicals and rate sensitive sectors like industrials, financials, utilities, materials, real estate, health care and discretionary are all working thanks to an improving macro backdrop and great earnings.  

The S&P 500 Equal Weight Index is up 14.7% YTD, outperforming the S&P’s 12.8% gain (chart).

This outperformance shouldn’t come as a surprise.

On June 1, we published Raising Our S&P 500 Price Target to 8200.

Broadening leadership is one of our favorite bullish themes.

On May 18, we told you Small Cap Stocks Are Cheap and Growing Faster Than Mega-caps.

Then, on June 15, we told you Buy Energy Stocks to Hedge AI Exposure.

And on July 6 we told youMag 7 Weakness Accelerates Rotation into Dividend Stocks.

All of these posts highlight the need to expand your investing scope.

Today, we’ll show you why you can have it all as the macro, fundamental and valuation setups favor a broad rally that lifts tech, cyclicals and rate sensitive sectors, simultaneously.

Welcome to the everything rally.

We’ll wrap up with a sector diversified list of 20 winning outliers seeing the biggest institutional inflows.   

Rangebound Oil & Interest Rates Support an Everything Rally

The current macroeconomic backdrop favors broadening leadership.

We have a contrarian view on rising oil and interest rates – we believe they’re only temporary (chart).

Note how WTI tracks 10Y yields:

The reality is the war in Iran is having a harder time keeping oil prices elevated as commodity markets continue to find creative workarounds to the Strait of Hormuz.

In addition, oil supplies elsewhere remain ample. Remember, prior to the war, the world was oversupplied.

As for interest rates, their increase largely reflects better than expected US economic growth.

The Citi Economic Surprise Index is at 30. Positive readings indicate economic data is exceeding consensus expectations.

Better yet, the latest Atlanta Fed Q3 GDP nowcast is 5.8%.

Inflation will recede with oil prices as geopolitical risk continues to fade over time, making a durable rate spike less likely. It will also help Fed rate hike chatter die down too.

This macro view favors cyclical and rate sensitive sectors like utilities, industrials, financials, real estate, consumer stocks and materials most.

That doesn’t mean tech won’t do well too, but for different reasons:

• Tech’s much more attractive after July’s big AI positioning reset.
• Premium software names are back in the saddle.
• Tech earnings will continue to be best in show through 2027.
• And at just 22X, tech valuations are cheap relative to 50% 2026 EPS growth.

The macro points to an everything rally.

Let’s check on the earnings outlook to see if it confirms the signal.

Earnings Trends Support an Everything Rally

We know stocks follow earnings.

Record fundamentals are the biggest driver of the strengthening everything rally.

S&P 500 earnings growth has rarely been stronger reflecting a healthy economy, record 15% net margins and the booming AI infrastructure build out.

Index EPS are seen rising a whopping 29% in 2026, roughly four times the 7.4% long-term mean.

Just as impressive is increasing earnings breadth.

Every sector is seen growing earnings at least 10% this year with the exception of counter-cyclicals like staples, real estate and healthcare.

Technology, communication services, materials, discretionary and energy are all seen growing profits north of 27% in 2026:         

Let’s shift gears to equity valuations to see how they stack up.

When it comes to valuation, we never analyze it in a vacuum – we always view it relative to earnings growth.

Broad equity valuations are very attractive at just 20.5X 12-month forward earnings for the S&P 500 (chart) given that the index is forecast to grow profits a stunning 29% this year and another 14% in 2027.

Look Outside of Tech Stocks as Big Rotation Boosts S&P 500

We’ve made the case for a broadening bull market. Now, let’s tackle portfolio construction.

At the index level, the best way to get diversified exposure to cyclical and rate-sensitive sectors while maintaining a healthy tech allocation is with the S&P 500 Equal Weight Index.

The Equal Weight S&P is much more diversified across sectors than the S&P 500, where close to half the allocation is in tech and communication services, crowding out juicy cyclical and rate-sensitive sectors like industrials, materials, real estate, utilities, discretionary and financials (chart).

But the S&P 500 Equal Weight still has a healthy 21% in tech and communications, providing critical exposure to the market’s most important sector.

If you want to play it with an ETF, use the Invesco S&P 500 Equal Weight ETF (RSP) which has $100B in assets, a low 0.2% expense ratio and a MAP Score of 60 with healthy inflows over the last few months.

At the stock level, some of the best bets in the market today are in smaller, large-cap names which are overrepresented in the Equal Weight S&P 500 Index. They’re the focus on today’s best ideas list.

While most research houses were too conservative and got it wrong in 2026, MoneyFlows got it right.

For access to the below list of stocks, become a PRO Member or if you’re a money manager or RIA, contact us about our Advisor Solution subscription.

Our data is built to find the outlier stocks ahead of the crowd.

Below are the top 20 stocks in the S&P 500 Equal Weight Index as ranked by our proprietary MAP Score.

Many of the stocks below have been massive winners for us.

We think they still have plenty of gas in the tank for big gains later this year.