New Delhi, Aug. 4 -- Chip stocks have taken it on the chin lately, but worries about the AI trade don't have to bring down the entire market.

The S&P 500's information technology and communications sectors fell 15% from June 1 through July 29, when the Federal Reserve announced it was holding the fed-funds rate steady, strategist Jim Paulsen wrote Monday on Substack.

But the benchmark index's other nine sectors were up 4%, which helped soften the blow to the IT and comm stocks and the index itself. The overall S&P 500 ended up down less than 4%.

Breadth is healthy. The index's much smaller loss proves it. So does a nearly 3% gain in the Invesco S&P 500 Equal Weight ETF.

Volatility in the AI trade isn't tanking the market. Paulsen thin...