Bloomberg Businessweek – Stock Rotation Hits Tech Giants as Small Caps Rise
Date: February 3, 2026
Hosts: Carol Massar & Tim Stenovec
Special Guests: Eric Weiner (Bloomberg News), Neil Dutta (Renaissance Macro), Pat Clark (Bloomberg News), Jamie Madera (BlackRock)
Episode Overview
In this episode, Carol Massar and Tim Stenovec probe the latest market dynamics, focusing on a notable rotation away from mega-cap tech stocks toward small caps amid renewed volatility. They unearth the drivers behind sharp moves in software and tech, analyze the economic and policy implications of a new Federal Reserve chair, and discuss housing innovations and retirement planning. Through expert interviews and Bloomberg exclusives, the episode connects the dots between Wall Street reactions, policy changes, and everyday financial security.
Key Discussion Points
1. Market Check: Tech Selloff & Small Cap Surge
- (02:10–05:39)
- Eric Weiner, Senior Editor, Bloomberg News, breaks down a volatile trading day driven by fears that AI advancements (notably developments by Anthropic) could dethrone certain tech incumbents.
- Software stocks, especially within the Magnificent Seven, faced heavy selling.
- Microsoft experienced a pronounced dip due to heavy AI spending.
- Market nerves over "who will survive AI" stretch from enterprise tech to financial data providers (London Stock Exchange, S&P Global, etc.).
- Alphabet (Google) is highlighted for its outperformance, now sizing up Nvidia for the world’s largest market cap.
Memorable Quotes
- "Anthropic really freaked out the market. And software has been selling off...I mean, if you look at like the Magnificent Seven, you can see Microsoft has really come down more than the others and that's spending on AI."
— Eric Weiner (02:42) - “It's because people are afraid that they're going to be replaced.”
— Eric Weiner (03:13) - “Today may have been overdone. It could have been a deep seek moment where people initially react and then sort of come back to the table.”
— Eric Weiner (04:57)
Timestamps
- (02:42) Tech’s reaction to Anthropic; Microsoft and the Magnificent Seven
- (03:54) Alphabet vs. Nvidia: the big cap race
- (04:57) Supermicro’s big earnings beat calms jitters
- (05:14–05:39) Comment from Bloomberg’s Mandeep Singh: “software is not all going away; valuation story too"
2. Macro Headwinds: New Fed Chair and Market Volatility
- (08:44–16:56)
- Neil Dutta, Partner and Head of Economic Research at Renaissance Macro, explores market risks tied to a Federal Reserve leadership transition.
- Historically, new Fed chairs face an average S&P 500 drawdown of 17%.
- Incoming chair Kevin Warsh’s surprisingly dovish turn during the nomination process contrasts with his previously hawkish stance.
- Senate politics may delay confirmation amid ongoing probes into Jay Powell.
- Discussion of Warsh’s policy style (more discretion, less forward guidance), potential risks of higher long-term rates, and the limits of any individual’s influence over Fed consensus.
Memorable Quotes
- "He's been hawkish throughout his ENT career, up until about six months, during which he's been interviewing for the Fed job for a president who calls himself a low interest rate person. Shocking, I know."
— Neil Dutta (09:42) - "The Fed is bigger than any one person, and that probably limits a lot of the sort of anxiety that you might get to markets."
— Neil Dutta (10:40) - "He's also a big critic of forward guidance...that helps move...the front end of the yield curve to the back end...If you get away from forward guidance, that kind of goes away and it pushes up term premiums, which...makes longer term interest rates higher."
— Neil Dutta (13:23)
Timestamps
- (08:44–09:42) Historical market reactions to Fed chair transitions
- (09:42) Warsh’s shift from hawk to dove
- (10:40–11:32) The limits of individual leadership at the Fed
- (12:51–13:23) Communication strategy for a potential Warsh Fed
- (15:47–16:55) “Shadow Fed” discussion: Druckenmiller’s influence
3. Housing: Rent-to-Own and the Affordability Crisis
- (17:28–24:10)
- Pat Clark, Real Estate Reporter at Bloomberg News, details Bloomberg’s exclusive on a new rent-to-own housing initiative.
- Private investors acquire newly built homes (sometimes built specifically for this program).
- Renters have a pathway to ownership, often with assistance to save for a down payment.
- Discussion around the use of federally backed mortgages (Fannie Mae/Freddie Mac) to reduce future costs.
- Practical hurdles of location, permitting, and whether homes will be built where people actually want to live.
- Uncertainties remain around investor returns and how program complexity may affect housing affordability.
- Speculation that “Trump homes” could be a political branding move to address the housing crisis.
Memorable Quotes
- "Builders are in the moving business, not the storage business...they give [homes] to someone else who can hold them on a balance sheet and figure out how to manage them."
— Pat Clark (18:42) - “It kind of doesn’t matter if you create a million homes in places where people don’t want to live.”
— Carol Massar (19:48) - "This is a complex idea, and it may prove too complex to actually, you know, operationalize."
— Pat Clark (23:06) - “Would they be called Trump homes? That’s the way people are talking about them now.”
— Pat Clark & Tim Stenovec (24:06)
Timestamps
- (17:34–18:33) How rent-to-own would work
- (18:33–19:10) Builder/investor dynamic and pitfalls
- (19:48–20:38) Location, permitting, and urban affordability
- (22:01–23:03) Who profits? Will affordability survive program layers?
- (24:06) “Trump homes” and political messaging
4. Women, Money, and Power: Rewiring Retirement
- (27:17–34:25)
- Jamie Madera, Managing Director, Head of U.S. Wealth Advisory & Retirement at BlackRock, discusses how Americans can plan for longevity and financial security.
- Emphasis on starting to save young and the necessity of time in the market.
- BlackRock’s role in innovating retirement solutions (e.g., target date funds).
- Shift from simply accumulating assets to creating retirement income—especially via target date funds with embedded annuity options (“Life Path Paycheck”).
- Women’s longevity is changing retirement calculus; conversations increasingly focus on security and clarity for women managing longer retirements due to outliving spouses.
- Over 50% of Americans now fear outliving their assets more than death itself.
Memorable Quotes
- "Retirement is changing so drastically. The ecosystem, everything about it is changing. Anything we can do as a society to help people save earlier, invest earlier and fund those longer lives—that is a great thing."
— Jamie Madera (27:57) - "More and more people are asking for [lifetime income]. Over 50% of Americans are more scared of outliving their assets than dying."
— Jamie Madera (31:06) - "People get to the end and they're like, wait a minute, this isn't what I expected."
— Tim Stenovec (34:16) - "Let me know I have some type of guarantee and then I will use the rest of my savings on discretionary items... Clarity is the big word for everyone."
— Jamie Madera (33:34)
Timestamps
- (27:57–28:32) Retirement ecosystem changes and starting early
- (29:16–30:31) The goal: converting savings to secure retirement income
- (31:06–32:26) How BlackRock’s Life Path Paycheck option works
- (33:34–34:16) Special focus on women, longevity, and need for clarity
Additional Notable Moments
- (04:00–04:43) Supermicro Computer's standout earnings—an investor sigh of relief amid volatility
- (22:01) Homebuilders like Lennar rally on rent-to-own speculation
Summary Table of Important Segments
| Topic | Speakers | Timestamps | Key Insights | |----------------------------------|----------------------------------|---------------------|--------------------------------------------------------------------------------------------------| | Tech selloff, market rotation | Eric Weiner | 02:10–05:39 | AI anxieties, software rout, Alphabet’s rise, Supermicro’s outsized guidance | | Fed chair transition | Neil Dutta | 08:44–16:56 | Warsh’s hawk-to-dove pivot, Senate gridlock, risks of less forward guidance | | Housing innovation (rent-to-own) | Pat Clark | 17:28–24:10 | Private investor/builder model, feasibility doubts, political angle: “Trump homes” | | Retirement, longevity & women | Jamie Madera | 27:17–34:25 | Life Path Paycheck, growing fear of outliving assets, focus on women and the need for clarity |
Episode Takeaways
- Wall Street is entering a period of sharp shifts as AI-driven disruption unnerves even blue-chip software giants, pushing investors to reevaluate traditional tech winners in favor of smaller, less-hyped opportunities.
- Policy and political dynamics are amplifying uncertainty, with the untested leadership of an incoming Fed chair and the potential for delays clouding market outlooks.
- Innovative (yet complex) housing programs are on the policy agenda to address affordability, but execution and effective targeting remain major concerns.
- The conversation about retirement in America is rapidly evolving—particularly for women—centered on managing living longer and ensuring reliable, lifetime income rather than just amassing savings.
Recommended Listening: For those navigating investment, policy, or personal finance in 2026, this episode delivers both immediate market context and longer-term strategies for financial security.