The market followed through on my bearish tilt this week as a “risk-off” mood took hold, hitting software and crypto particularly hard. While the major indices remained relatively flat, a massive rotation is occurring under the surface. Capital is aggressively moving away from high-beta tech and into value-oriented sectors.
Industrials, energy, and materials all hit fresh record highs this week. This pushed the S&P 500 Equal Weight Index (SPXEW) to a new all-time high, signalling that while the “headline” tech stocks are struggling, the broader market remains remarkably resilient.
Key Performance Themes
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The Tech Washout: Software reached capitulation levels, with the sector ETF hitting its most oversold reading since 2001 (RSI of 14).
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AI Conviction: Despite the price action, hyperscale’s like Alphabet and Amazon signalled massive increases in Capex, proving that the long-term AI infrastructure trade is only accelerating.
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Crypto Volatility: Bitcoin saw a sharp deleveraging event, plunging from $83K toward $60K before finding some footing back near $70K.
Technical & Economic Snapshot
Market Signals
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Dow Jones (DJI): Crossed the 50,000 milestone for the first time—a major psychological win for non-tech leadership.
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Nasdaq (NDX): Technically damaged after breaking below its 100-day moving average. I’m remaining cautious here until we reclaim that level.
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S&P 500 (SPX): Currently rangebound between 6,800 and 7,000, having successfully bounced off its 100-day support.
Macro & Fed Outlook
The labour market is showing undeniable signs of cooling. With job openings at 5-year lows and layoffs hitting levels not seen since 2009, the “higher for longer” narrative is being tested. However, the Fed seems content to wait; current consensus suggests no rate cuts until at least June.
Bottom Line: We are seeing a healthy broadening of the market. The “Tech-only” rally has evolved into a “Real Economy” rally. I am watching the Nasdaq closely for a trend reversal, but for now, the strength lies in value and defensives.