The first half of the trading year typically operates on a dominant market narrative. Over the past six months, that narrative has favored massive artificial intelligence (AI) and compute infrastructure rallies. By July, those storylines can start to lose momentum as investors reassess crowded trades and look for the next source of market breadth.
As Q3 institutional window dressing concludes, portfolio managers have already locked in their first-half performance for client statements and are actively resetting their risk models. Some institutional investors may be looking for a specific setup right now: asymmetric risk-reward in sectors starved of capital.
