AI in action · Markets
Can Stocks Rise if AI Falls? Goldman and Dan Niles Differ
Goldman Sachs said November shows the S&P 500 can rise while tech lags, as the index was up 0.6% for the month; Dan Niles warned of a March 2000 moment.
The question that has hung over markets all year is whether the S&P 500 can rise without its AI leaders. This week two well-known voices gave different answers. A Goldman Sachs analyst wrote that "one of the questions that has been permeating investor conversations this year is 'can the market go up if Tech goes down'", and argued that November's trading suggests the answer may be yes, CNBC reported.
The evidence is in the sector table. Through the start of the week, energy was the only S&P 500 sector to have done worse than information technology in November, yet the index was still up 0.6% for the month. Rotation was doing the work: money left chipmakers and AI infrastructure names after the midterm sell-off and went into the rest of the market. Apple, which CNBC said had already set three record closes in November, closed at another record of $355.63 on Wednesday, up about 30% this year, while Nvidia ended the session about 27% below its October peak.
Dan Niles, founder of Niles Investment Management, sees the risk differently. He told CNBC on Wednesday that he does not think the AI trade has topped, "for one simple reason: Agentic AI is very, very new", and pointed to the take-up of Meta's consumer AI product, Muse. But he said a pullback in capital and equipment spending would be a serious problem, and compared that scenario to the dot-com peak: "it is March of 2000." Even in a bear market, he said, he would keep investing to catch the strong rallies.
Wednesday itself showed both views at work. CoreWeave's results lifted the AI complex, with Baird Private Wealth strategist Ross Mayfield saying markets were "continuing to unwind last week's overshoot to the downside", and the Nasdaq Composite rose 1.6%. Hours later, the report that Nvidia's board might remove its chief executive sent the stock down more than 8% after hours, a reminder that index-level risk still runs through a few names.
The two arguments are less opposed than they look. Goldman's point is about breadth: a market where most sectors can carry the index is sturdier than one that needs a handful of chip stocks. Niles' point is about the cycle: if AI capital spending turns, the companies that depend on it fall hardest, and the rest of the market is unlikely to be spared entirely. For investors, the practical test is whether the equal-weighted index and the sectors outside technology keep making progress on the days the AI leaders fall.
Sources: CNBC — Stock market news for Nov. 11, 2026 (live updates: Goldman Sachs note, Dan Niles interview)