Hypothetical AI Doomsday Scenario Lights Up Wall Street’s HALO Trade

Hope you’re enjoying this round of Monopoly, the HALO Edition, where the most coveted asset on the board isn’t Boardwalk but a “Get Out of AI Jail Free” card.

The so-called “heavy assets, low obsolescence” (HALO) trade — which prioritizes investments insulated from the upheaval of artificial intelligence — was front of mind Monday. The S&P 500 fell 1%, as spooked investors circulated a note from research firm Citrini that imagines a scenario (it doesn’t predict one) in which there’s an AI-induced stock market crash before 2028.

Setback in the Future

The market has been undergoing a rotation to value stocks since the fall, with the AI hyperscalers that drove overall gains in recent years as flat as a Pepsi opened yesterday. And thus the back-to-basics HALO trade has taken on some shine. Simply put, focusing on “heavy assets, low obsolescence” means investing in sectors that will be spared from the next large language model refresh.

For example, AI could solve the Collatz conjecture tomorrow, sketch out a reliable theory of everything on Thursday and stop producing instances of subpar code by Friday and … you would still need to gas up your sedan. That’s a point in favor of oil and gas giant Exxon Mobil, a popular HALO trade whose shares are up 25% in 2026. It’s also February, you probably still need to keep warm, a point for heating and ventilation company Carrier Global, up 20% this year. And when noon rolls around, you’ll still need lunch, a point for both Deere, up 39% this year thanks to its machines that harvest your food, and McDonald’s, your cheat meal fallback that’s up 9%. Companies that make or own lots of specialized equipment, or that serve a large physical footprint, have a HALO. It glows especially bright on a day like Monday:

• A post by James Van Geelen, the ne plus ultra finance Substacker, and his firm Citrini Research drew widespread attention for its imagining of a 2028 in which AI has led to unceasing white-collar layoffs, handcuffed consumer spending power and, consequently, hammered economic growth. Ultimately, in this hypothetical scenario, the S&P 500 sinks 38%.
• Companies Citrini highlighted as being significantly (theoretically) disrupted did not have a good Monday: American Express fell 7.2%, and DoorDash fell 6.6%. Meanwhile, one leading software ETF fell 4.7%, reflecting continued broader fears about the sector’s AI exposure, and IBM had its worst day in a quarter-century, a 13% drop, after AI developer Anthropic said its Claude Code tool could modernize a programming language run on the company’s computers.

Lag Up: S&P 500 sectors like industrials, materials and utilities have already been outperforming the broader index for weeks. Some have even pilloried the once dominant Mag Seven tech stocks as the “Lag Seven.”