Settling and repricing of AI stocks is important, says Farr, Miller & Washington's Michael Farr

Market Overview - The four major averages have returned to negative territory after a brief bounce, with technology stocks lagging behind as high-flying stocks experience a pullback [1] - There is concern that a sentiment shift away from tech could drag down the entire market, although underperforming stocks may not decline as significantly [2] Investment Strategy - A strategy suggested is to consider buying the equal-weighted S&P 500, as the current index is heavily concentrated in a few high-performing stocks, specifically the MAG 7, which constitutes 25-30% of the index [4] - There are still companies trading at reasonable multiples that offer safety and good dividends, indicating a cautious approach is advisable [6] Earnings Insights - Upcoming earnings reports are expected to provide clarity on the long-term strength of the consumer and the economy, making it a significant day for earnings [3][9] - Companies like DraftKings, Airbnb, and others are anticipated to reveal insights into consumer spending patterns, which are crucial for understanding economic health [8][9] Federal Reserve Messaging - The Federal Reserve's recent communications indicate a focus on adjusting rates to find the right level rather than easing or stimulating the economy [7][8] - The market's reaction to the Fed's messaging has been negative, reflecting uncertainty about future rate adjustments [7]