The recent momentum stems from a tech rebound easing concerns over AI-related spending and disruptions, alongside broader market rotation (e.g., strength in areas like energy, small caps, and some defensives). Markets have shown choppiness in early 2026, with volatility potentially tied to jobs data, inflation reports (like CPI), and Fed interest rate expectations—key releases are upcoming this week, which could influence direction. Last week, a major AI tool release from Anthropic (focused on automating legal work) caused a massive sell-off in data-heavy companies like RELX and Thomson Reuters. Today, the tech sector is attempting to stabilize as investors decide if that “agentic” shift is a long-term threat or a buying opportunity.
It will be a long term threat for the software industry, this fear is reflected in Microsoft 21% decline from its all-time high. But right now the S&P 500 is rebounding, I believe it is the last leg up, the trend in the S&P 500 will turn down as the rotation out of technology continues. The S&P 500 is forming an expanding triangle [(i),(ii),(iii),(iv),(v)] inside the last move up. The FTSE 100 is more resilient than the S&P 500 because it is not sensitive to technology.
