Markets Edition – AI’s Subtle Impact On The Equity Market
KEY TAKEAWAYS
- The S&P 500's composition has evolved, with the AI-influenced Growth cluster now comprising 55% of the index—up from under 20% three decades ago—fundamentally altering the equity market's risk profile
- This shift increases the S&P 500's risk and volatility (beta), making it more sensitive to the AI theme and requiring a new U.S. equity strategy beyond traditional value versus growth analysis
- Investors should look beyond large-cap stocks to small and mid-cap equities for more direct exposure to traditional macroeconomic influences, diversifying away from the concentrated AI influence in the S&P 500
An old investing adage is to just own the S&P 500. But you have to know what you're buying — and as Scott Chronert and Patrick Galvin discuss, the S&P 500 has seen a major evolution over the last 30 years. So how has it changed, and what do these changes mean for broader exposure to U.S. equities and the AI theme?
This podcast contains thematic content and is not intended to be investment research. Nor does it constitute financial, economic, legal, tax or accounting advice. This podcast is provided for information purposes only and does not constitute an offer or solicitation to purchase or sell any financial instruments. The contents of this podcast are not based on your individual circumstances and should not be relied upon as an assessment of suitability for you of a particular product, security, or transaction. The information in this podcast is based on generally available information and, although obtained from sources believed by Citi to be reliable, its accuracy and completeness are not guaranteed. Past performance is not a guarantee or indication of future results. This podcast may not be copied or distributed, in whole or in part, without the express written consent of Citi. © 2026 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.
Scott Chronert, U.S Head Equity Strategy, Citi
Scott Chronert is a Managing Director at Citi Research serving several roles, including US Equity Strategist, Global Head of ETF Strategy & Analysis, and US Small/Mid Cap strategy. Scott assumed the US Equity Strategy role at Citi in October 2021. He brings a fundamental approach to assess the US equity landscape. Regarding ETFs, Scott and his team have been at the forefront of sell-side, institutional grade, analysis of the ETF ecosystem since 2012. His product covers all facets of ETFs, including broader industry trends, flow analysis, stock and market impacts, complemented with positioning views covering most asset classes and geographies. His work on US Small/Mid Cap provides a blend of top-down and stock-specific insight. Scott also contributes to Citi’s global equity strategy product. Prior to joining Citi Research in 2010, Scott spent more than 25 years in Institutional Equity Sales and Management roles (mostly at Citi). Citi was named Global ETF Research Provider of the Year 2019 by ETFexpress. Scott is a graduate of Dartmouth College, AB degree 1978 and UCLA Graduate School of Management, MBA degree 1980.
Patrick Galvin, U.S ETF Strategy, Citi
Patrick Galvin is a Vice President at Citi Research covering US Equity Strategy as well as US ETF Strategy. Prior to joining Citi in 2022, Patrick spent 8 years on the buy-side working for two of the largest global ETF issuers. Most recently, he spent 4 years working as an Institutional ETF Specialist & ETF Capital Markets Strategist within Invesco’s ETF business. Prior to Invesco, Patrick spent 4 years working within Deutsche Bank’s Asset Management division (DWS), where he worked in ETF Capital Markets. Patrick graduated summa cum laude from Gettysburg College in 2014 with a BA in Economics and is a CFA Charterholder.
