According to Woofun AI, Richard Bernstein, Head of Macroeconomic Strategy at Janus Henderson, suggested that the sell-off in AI-related stocks could create a favorable environment for small-cap stocks by lowering overall financing costs.
Last Thursday, a key semiconductor ETF fell nearly 14% from its October high, triggering market alerts. Bernstein told CNBC that this represents a healthy repricing of asset values. Funds had previously flooded into AI data centers, leaving other companies short on capital; if valuations adjust, the cost of financing for the economy will decline.
Woofun AI's compiled data shows that, despite small-cap stocks rising over the past few trading days, their overall performance this week remains negative. Credit default swap (CDS) spreads reflect concerns about profitability, and chip stocks have fallen for eight consecutive trading days—the longest such streak since 2008.
Bernstein challenges the expectation of only one Fed rate hike. On September 16, 2026, the Fed raised rates by 0.25 percentage points, the first increase since July 2023. He noted that consumer prices, producer prices, and import prices remain elevated, with core import price growth outpacing core consumer price growth—a reversal of a 30-year trend—indicating that the U.S. is importing inflation. Consumer goods sectors have performed slightly better, but market concerns over recession are growing.
Peter Schiff believes most U.S. stocks are in a bear market. According to Goldman Sachs (GS.US), the median S&P 500 component is down approximately 16% from its peak. Bernstein acknowledges that market weakness negatively impacts the chip and technology sectors, but the long-term outlook is not entirely constrained by the dominant factors of the past two to three years.