One strong day is not enough to call this a lasting rotation. I would look for persistence and breadth.
If staples, healthcare and other defensive sectors continue outperforming for several weeks, while tech repeatedly fails to regain leadership, that would be much more convincing. We are already seeing some persistence: consumer staples gained about 5% last week while technology fell sharply.
I would also watch earnings revisions and valuations. A genuine shift should be supported by stable or improving earnings expectations for defensives, rather than investors simply paying higher multiples for safety.
Berkshire is particularly interesting. Its cash and Treasury holdings were about US$359B at end-Q2, but it has restarted sizeable buybacks and deployed capital into equities and acquisitions.
For me, the clearest confirmation would be several weeks of defensive relative strength even on days when the overall market rises. If defensives only outperform when tech crashes, it is probably a flight to safety. If they keep leading when risk appetite returns, then we may be seeing a genuine change in market leadership.
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