MarketSurge powers the charts in this video.
Last week began with a big downside gap in anything AI-related after comments from Anthropic’s, OpenAI’s, and SpaceX’s CEOs that the progress in AI should probably slow down because of safety concerns. Those gaps were quickly bought and erased by the end of the week. In many cases, some of the AI stocks even had a strong green week – DELL, AMD, SNDK, MU.
Software, on the other hand, started the week with a big breakout, followed by sideways consolidation. Cybersecurity led the way – CRWD, NET, FTNT, ZS, PANW, OKTA.
Crypto had its mid-week shakeout. First, the Clarity Act didn’t pass the House. Then, the Fed raised rates on Wednesday. By Friday, all major crypto assets and stock proxies were back near their multi-week highs – ETHA, IBIT, SOLZ, ZCSH, PURR, MSTR, COIN, HOOD, etc. The SEC rolled out a 5-year exemption for tokenized stock trading, which lit up the entire space.
From a big-picture perspective, small caps keep losing ground. Russell 2k is not far from testing its 200dma. Large and mega caps continue to show incredible resilience and keep the indexes afloat. Going higher on bad news (rate hikes) is typically bullish, especially if we see follow-through next week. The volatility is likely to remain elevated ahead of the Midterm elections. The results from them can have a significant impact on who the next leaders are. A democratic sweep will probably put many AI-related stocks under pressure, as it would make the development and operation of data centers more tightly regulated.
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