Barclays now argues that AI has overtaken traditional macroeconomic factors as the primary driver of market behavior in 2026. According to analyst Anshul Gupta, Nvidia earnings have become a larger catalyst for traders than Federal Reserve policy or inflation data. Gupta insists this is a genuine tech revolution rather than a speculative bubble.

He points to valuation support, noting that Big Tech trading near decade-low multiples contradicts bubble fears. U.S. equities also lag global peers, another sign that euphoria hasn't fully taken hold. The shift creates a tug-of-war between fear and FOMO, keeping volatility high. While structural risks like geopolitics and the U.S. midterms remain, the bank sees a market favoring stock pickers over index investors.

Correlations are falling, meaning individual company fundamentals matter more than broad economic trends.