Mark Newton, global head of technical strategy at Fundstrat, advises investors to purchase technology stocks during the current dip while maintaining portfolio diversification. He notes that the market has experienced significant rotation throughout 2026, shifting from an energy rally of nearly 40% toward the technology sector.
The equal-weight S&P 500 index declined by approximately 6%, while the headline S&P 500 reached a record high just seven trading days prior to the analysis. Newton observes that volatility across various asset classes has increased over the past month, although technology stocks have retained most of their gains from September.
CoreWeave, an AI cloud provider, saw its stock price drop by 15% before recovering on Thursday. The company faces ongoing concerns regarding the debt required to fund its AI infrastructure. Other chip and memory manufacturers, including Seagate, Western Digital, Intel, and SK Hynix, have also shown weakness.
Steve Sosnick, chief strategist at Interactive Brokers, estimates that technology stocks account for 45% or more of S&P 500 index funds. He warns that a sell-off in tech could trigger broader liquidation in ETFs and index funds, potentially creating negative momentum across the market.
