How vulnerable are stocks?

Market Overview - The AI trade is currently under scrutiny, with major tech stocks experiencing declines, raising concerns about market vulnerability to a larger pullback [1][4] - The NASDAQ is in the midst of a significant win streak, with 102 consecutive closes above the 50-day moving average, nearing historical records [7][9] Interest Rates and Economic Impact - Interest rates have been rising since the Federal Reserve's recent cut, with the 2-year rate increasing from 3.55% to 3.65%, the 10-year from 4.08% to 4.18%, and the 30-year from 4.68% to 4.77% [2][6] - Rising debt levels in the tech sector are becoming a concern, particularly as companies like Oracle shift to financing projects through debt rather than cash flow [5][18] AI Sector Performance - AI-related stocks have contributed to 75% of the S&P 500's returns and 80% of its earnings growth since the launch of ChatGPT in November 2022 [10][16] - Despite a broader rally, only 59% of S&P stocks are above the 200-day moving average, indicating a lack of broad market strength [11][12] Company-Specific Insights - Oracle has seen a significant stock price increase of 40% due to its willingness to engage in negative cash flow for AI investments, but this has led to concerns about its rising debt, which now stands at $91 billion [5][19] - Ken Griffin of Citadel has drawn parallels between the current market environment and the dot-com bubble, highlighting the excessive capital expenditures and investor enthusiasm surrounding AI [15][16]