Recently, the Nasdaq Composite Index, representing the US tech stock market, has hit new intraday all-time highs. Meanwhile, crypto-related stocks have notably strengthened. At first glance, this appears to be a classic tech-driven rally, but when we break it down using weight structure, volatility indicators, and sector rotation rhythms, we can see that this rally is actually driven by a triple mechanism of 'concentration of weights + enhanced profit expectations + released risk appetite.'

From panic to recovery: A quant path based on VIX sentiment.

In the past month, the most significant change in the market isn't the price itself, but the reconstruction of the risk pricing mechanism. Sentiment indicators, represented by the CBOE Volatility Index (VIX), provide the most direct quantifiable evidence.

According to data from the Federal Reserve Bank of St. Louis (FRED database):

· Late March 2026: VIX around 31 (Stage High Point)

· Mid-April 2026: VIX falls to 18.3

· Monthly Decline: Approximately -12.7 Points (About -41%)

This magnitude of change historically belongs to the typical 'rapid de-risking phase'. Generally, when VIX is above 30, the market is in a clear risk-averse zone; when it falls below 20, it indicates that funds are re-entering the risk asset allocation cycle.

From a temporal structure perspective, this process can be divided into three phases:

Firstly, during the high volatility phase at the end of March, risk premiums rapidly surged as funds withdrew from overvalued assets, and the Nasdaq index entered a correction zone. Secondly, in early April's consolidation phase, although VIX remained above 25, the tech sector showed notable resilience, closely related to its high earnings certainty. Finally, after mid-April, as VIX fell below 20, the market officially entered a risk appetite expansion phase, with funds flowing back into growth assets and pushing the index to new highs.

Quantitative dissection of weight structure: Why can the index continue to hit new highs?

To understand why the Nasdaq can quickly recover and hit new highs in a short period, we must return to its index composition mechanism. According to index compilation data published by Nasdaq, both the Nasdaq Composite Index and Nasdaq 100 use a market capitalization weighting mechanism, which means that weight changes are directly determined by company market caps.

Latest structural data shows:

· Tech Sector Weight: Approximately 55%–60%

· Communication Services: Approximately 12%–15%

· Consumer Discretionary: Approximately 12%–14%

· Top 10 Component Stocks Weight: Close to 45%–50%

This structure indicates that the essence of index growth is not 'broad-based growth' but is driven by a few mega-cap companies. From a mathematical perspective, the index increase can be represented as:

Index Return ≈ Σ (Stock Weight × Stock Price Increase)

In this framework, as long as high-weight sectors (especially the tech sector) maintain high growth, the index can continue to rise even if other sectors perform mediocrely.

Growth Contribution Layering in Sector Evolution

Combining earnings expectations with market performance, the current sectors can be divided into three levels:

First Layer: Core Assets in Technology and AI (Main Engine)

According to market consensus data, the S&P 500 tech sector's earnings growth rate is expected to be in the range of 15%–20% in 2026, significantly higher than the overall market average (about 8%–10%). This difference allows the tech sector to continue obtaining a premium in the valuation system.

Meanwhile, capital expenditure (CapEx) related to artificial intelligence continues to expand. According to several investment banks' statistics, global AI-related infrastructure investment growth is expected to exceed 25% in 2026, directly driving the long-term growth expectations of cloud computing and software companies.

Second Layer: Semiconductors (Accelerator)

Changes in the semiconductor sector can be further validated by industry data. According to data released by the Semiconductor Industry Association (SIA):

· Early 2026 Global Semiconductor Sales Year-on-Year Growth of Approximately 13%

· Demand growth for AI-related high-performance computing chips is even higher

This structural demand change has significantly enhanced the earnings elasticity of semiconductor companies, with their stock price increases generally exceeding the market, thus continuously increasing their weight in the market capitalization weighting system.

Third Layer: Crypto Concept Stocks (High β Amplifiers)

Although crypto concept stocks account for less than 2% of the index weight, their volatility is far higher than traditional sectors. Cryptocurrencies, represented by Bitcoin, showed significant increases in mid-April, driving related listed companies' stock prices to amplify.

This phenomenon usually occurs in historically high-risk appetite phases, where funds begin to shift from 'certain returns' to 'high-elasticity returns'.

VIX and Sector Rotation Correspondence: The Risk Appetite Transmission Chain

By comparing VIX changes with sector performance, a clear risk transmission model can be constructed:

· When VIX > 30: Funds Concentrated in Defensive Assets

· When VIX drops to 25–20: Funds Flow Back to Tech Leaders

· When VIX < 20: Funds diffuse into semiconductors and high β assets

This logic has been fully validated over the past month. As VIX dropped from 31 to 18, the market experienced a complete process from defense to offense to diffusion, with the sector rotation sequence being: AI Leaders → Semiconductors → Crypto Concept Stocks.

Stage Identification: Characteristics of Mid-to-Late Stage Diffusion Market

Combining weight structure, earnings data, and volatility indicators, the current market can be clearly positioned as a 'Mid-to-Late Stage Diffusion Phase'. This phase typically features the following characteristics:

First, the index keeps hitting new highs, but the gains are concentrated in a few heavyweight stocks; second, the speed of sector rotation accelerates, and high β assets become active; lastly, volatility remains low, but potential volatility risks are accumulating.

Historically, when VIX remains below 20 for an extended period while the index continuously reaches new highs, the market often enters an 'emotion-driven zone', where price sensitivity to expectations significantly increases.

Potential Risks and Forward-Looking Judgments

Despite the current strong market performance, several key variables still need attention from a data perspective. First is the valuation level; the tech sector is currently in a historically high range under high growth expectations, and if earnings fall short of expectations, it could trigger a weight adjustment. Second is volatility; if VIX rises back above 22, it typically signals a contraction in risk appetite. Finally, the sector structure; if semiconductor or core AI companies show a weakening trend, it will directly impact index performance.

Summary

Overall, this round of Nasdaq reaching new highs is a classic structural market, with its core driving force coming from the tech sector's weight expansion and earnings growth, complemented by a sustained rebound in risk appetite. From the rapid decline of VIX to the relay rise of the semiconductor and crypto sectors, the market has completed a full re-pricing process of risk. In this context, understanding the dynamic relationship between 'weight - earnings - sentiment' will be key to judging future market directions.

This content is based on publicly available information and analysis, representing personal views only and does not constitute any investment advice; the market is risky, and investing requires caution.