A stealth bear market is spreading beneath the S&P 500: A MASSIVE 60% of S&P 500's constituents are trading in bear market territory, despite the index being within ~3% of its latest all-time high. Notably, the Magnificent 7 have lost -$4 trillion in market capitalization since October 15th, while the Semiconductor Index has fallen more than -30% since June and dropped below its 200-day moving average for the first time in a year. This comes as investors exit crowded AI trades and rush into defensive and under-owned sectors. In other words, investors are increasingly questioning the cost of the AI buildout and how long it will take to generate returns, as hyperscalers' cash flow declines and they increasingly rely on debt and equity financing. Amazon's long-term debt alone surged to $173 billion from $66 billion in just 9 months. Meanwhile, the spread between B- and CCC-rated corporate bonds spiked to ~8%, a level seen fewer than 5 times since 1996. In every previous instance, the S&P 500 was at least -11.5% below its 52-week high. Will the stealth bear market spread across the broader market?