By Jacob Sonenshine

There's something in the water. More stocks than normal are making huge moves, upward and downward.

About 30% of S&P 500 constituents were up or down at least 20% in the past three months as of Thursday, according to Dow Jones Market Data. That isn't the highest ever, but it is above the 15% average for three- month periods dating back 20 years.

This is particularly notable because the entire market hasn't been terribly volatile. The Cboe Volatility Index, which measures expected volatility of the entire S&P 500, has averaged just over 17 in the past three months, compared with the average of 19 for three-month periods in the past couple of decades.

The VIX is often in the 20s, and is often far higher, when the share of stocks making such big moves surpasses 30%. So investors might expect relatively few shares to be doing so now.

And yet, "there are several eye-opening charts from areas that have seen huge moves -- either up or down -- of late," writes Frank Cappelleri, founder of the technical-analysis research shop CappThesis.

The explanation starts with the fact that many industries are undergoing changes, substantially altering their profit outlooks.

In artificial intelligence, chip makers and many manufacturers have seen profits explode higher in response to soaring demand from Big Tech services companies that are building data centers to support AI. Stock in Vertiv Holdings, which makes cooling equipment, is up 37% in the past three months, for example.

Meanwhile, plenty of software stocks have crashed. The market is concerned that big companies like Microsoft and Oracle won't get adequate returns on the billions of dollars they are channeling into data centers. A related concern is that those companies, and many smaller providers of software, will lose out to Anthropic and OpenAI as their AI models displace their products. Smaller software companies that have been hit include Salesforce and HubSpot.

Elsewhere, miners of copper and gold have soared as higher prices for those metals lift their sales, profit margins, and earnings. Copper prices have surged because of data-center demand and generally strong economic growth, lifting shares of Freeport-McMoRan by more than 50% over three months.

Newmont is up about 40% as gold prices catch a bid from central banks that are tilting their reserves away from the dollar.

Even consumer staples have jumped. They had underperformed the market so badly for so long that buyers came in to take advantage, especially as some areas of the tech sector have faltered.

Hershey's, one of the sector's best performers, is up 26% in three months. Chocolate demand has stabilized after a weak stretch, while raw cocoa prices have fallen, lifting margins.

The next question is why some of these moves are so extreme. The recent rallies in chip makers and in consumer staples makes their stock price charts seem to rise vertically. And the declines for the suffering stocks look like straight lines downward.

One explanation is that investors are moving money into investment vehicles that can exacerbate the moves. Money has poured into hedge funds. According to the SS&C Technologies Hedge Fund Index, the net amount that flowed into hedge funds each month has risen over the past three months. So far this month, the inflow has been the largest since May.

As cash has flowed in, hedge funds have bought up plenty of stock. A separate data set from Bank of America proves the point. The bank's hedge fund clients ordered a net $3.5 billion worth of individual stocks this year through Tuesday, while the bank's other clients were net sellers. The four-week average flow of hedge fund cash into single stocks has hit its highest level since 2020.

That kind of buying can cause stock surges, sometimes to prices above what anyone had previously expected. Many hedge funds operate on the assumption that rising stocks will continue to rise, and that declining stocks will keep falling, creating a reason for their trading to accentuate what is already happening in the market, explains Trivariate Research's Adam Parker.

"Money is flowing into multi-strategy [hedge fund] shops," says Ari Saas of asset manager M.D. Saas. "There are these exacerbated moves."

The takeaway for now is that there are plenty of opportunities for big gains in a stock, and plenty of risk of big losses.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 13, 2026 14:43 ET (19:43 GMT)

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