AI Mania Makes Old-School Industrials Behave Like Chip Stocks

Optimism surrounding the potential for industrial companies to profit from the artificial intelligence boom has fueled record-setting momentum in the sector. Now worries are mounting that the group’s link to AI may be getting too tight.

A gauge of 45-day correlation between the S&P 500 Industrials Sector, home to stocks like Deere & Co. and Fastenal Co., and the Philadelphia Stock Exchange Semiconductor Index is sitting at 0.75, near the highest level since June. A reading of 1 means the securities move in lockstep.