Axios

The S&P 500 appears relatively calm on the surface this year, but dig a little deeper and you'll find some wild swings.

Why it matters: Investors have retreated from the Big Tech names that carried the market in recent years, putting downward pressure on stocks.

By the numbers: The S&P 500 has fallen just 3% for the year, but that masks some big-time volatility.

• 57 stocks are up by at least 20%, and 47 stocks are down by at least 20%, according to an analysis conducted Friday afternoon by Bespoke Investment Group.
• That's unusual, says Paul Hickey, the investment advisory firm's cofounder.

The big picture: AI and the war are pushing stocks around in new ways.

• Investors are pulling back from software in the wake of the SaaS-pocalypse and rotating toward defense and energy stocks.

Winners. Energy and defense industry stocks like Valero (+43%), Occidental Petroleum (+40%) and Lockheed Martin (+34%).

Losers. Workday, which makes HR software imperiled by the SaaS-pocalypse, has declined 39% this year. Oracle, an AI darling stock, is down 20%, and Salesforce, the SaaS king, off 27%.

Yes, but: Software might be out, but hardware is very much in: Companies benefiting from the RAM and memory chip shortage are slaying.

• SanDisk is up 168% for the year; Micron (+48%).

Between the lines: The biggest stocks that weigh most heavily on the market haven't seen such wild ups or downs — but things are meh.

• The Magnificent 7 was down about 8% for the year, as of Friday afternoon, when Bespoke pulled the numbers.

How it works: The S&P 500 is weighted by company size — bigger firms have outsize impact on the index.

• The top 10 stocks on the S&P 500 — that includes the Mag 7 —  make up about 40% of the index, as Apollo Global's chief economist Torsten Slok recently pointed out.
• "If they do nothing, the other 60% has to go up to move the needle," says Hickey from Bespoke.

Reality check: You could also argue that the relatively mild fall for the Mag 7 stocks is keeping the market from looking even worse.

The intrigue: If Anthropic, OpenAI and SpaceX are added to the S&P 500 this year, market concentration could approach 50%, Slok noted. That would mean the index "basically doesn't offer much diversification anymore."

What to watch: Some of this trend is actually starting to reverse, says Abby Yoder, U.S. equity strategist at JPMorgan Private Bank.

• Software started performing better in the first week of the war, she tells Axios. Tech is recovering a bit now that it's out of the spotlight.
• "AI is taking a backstep to geopolitics," she says.

The bottom line: "For years we basically heard about how the market was top heavy. Now those mega-cap stocks haven't performed as well," Bespoke's Hickey says. "So they act as a weight on the market."

The AI boom is pushing one of America's most venerable environmental groups to cautiously support nuclear power after decades of resistance.

Why it matters: The Natural Resources Defense Council's position is both a sign of the urgent power demands that AI is creating and a larger shift underway among environmentalists to embrace an energy source many once rallied against.

Teneo, the CEO advisory firm, and Thoughtworks, the software engineering consultancy, are launching an AI-focused joint venture.

Why it matters: AI is advancing faster than many companies can adopt it. This partnership aims to help large corporations turn AI ambition into working tools.

Eleven major technology and retail companies — including Google, Amazon and OpenAI — have signed a new pledge promising to share threat intelligence about how scammers are abusing their services, the companies first shared with Axios.

Why it matters: AI and online forums are helping scammers organize to inflict more damage, forcing companies to rethink their strategies for protecting their users.

Anduril Industries founder Palmer Luckey backs the Pentagon's decision to blacklist Anthropic — and says if it were up to him, he would have reacted even more forcefully.

• He made the comments in an interview with Colin Demarest on "The Axios Show," our series featuring top Axios reporters interviewing newsmakers shaping politics, business, tech, and culture.

Why it matters: The Pentagon's designation of Anthropic as a supply chain risk is a move historically reserved for foreign adversaries. It means that other companies who do business with the Pentagon may have to cut ties with the AI giant.

Colleges besieged by AI-generated writing brought back blue-book exams to deter cheating, but some educators say hand-written tests don't showcase students' best work and disadvantage swaths of learners.

Why it matters: Educators say AI cheating is real — if sometimes overstated — but reverting to pen-and-paper tests sidesteps the reality that many employers want graduates who are comfortable using AI tools.

The Trump administration has ambitious deadlines to accelerate scientific discovery, Energy Department undersecretary Darío Gil and Dell CEO Michael Dell told Axios in an interview.

Why it matters: Government agencies and companies are mobilizing to use AI for energy, drug discovery and national security, all while promising new jobs.

The Justice Department's settlement with Ticketmaster this week marks a new chapter of the MAGA antitrust movement that may look different than some were expecting.

Why it matters: The deal offers a window into how Trump-era antitrust works, signaling that aggressive corporate breakups are out of favor.

The Pentagon is turning procurement into policy, staking its claim as Washington's most powerful AI player with its decision to ditch Anthropic.

Why it matters: As lawmakers debate guardrails, the Pentagon showed how it can reshape the AI industry with a single contract decision.

Tinder on Thursday announced new AI and non-AI powered features in an effort to connect with Gen Z singletons.

Why it matters: Users increasingly struggle to tell the difference between real connections and the bots.