Tech Stocks Dip as AI Doubts Linger on Wall Street

Market Sentiment - Current market sentiment reflects a risk-off attitude, with a dissonance between the desire for global reflation and concerns over U.S. trade dynamics, leading to lower bond yields [1] - The market is experiencing fear regarding air spending while simultaneously acknowledging the potential disruption in the software sector [3] Software Sector Insights - Not all software companies are equal; some are collaborating with AI model makers, indicating a differentiation within the sector [4] - The software sector has been recognized for its potential disruption, but the broader market has also faced challenges, with many previously strong adopters now under pressure [8] Earnings and Growth - The Russell 3000 median earnings growth is approximately 11%, a significant increase from low single digits in the previous year, indicating a positive trend in earnings [10] - Earnings reports have been solid, contributing to market stability despite broader economic concerns [9] International Trade and Investment - The recommendation is to focus on international trade, as there are favorable policy and fiscal tailwinds benefiting regions like Japan, Latin America, and Europe [6][7] - The absence of negative factors and real fundamental catalysts, such as defense spending and infrastructure rebuilding, are seen as potential growth drivers [15] Market Dynamics - The market is currently taking a pause on major tech stocks (MAG seven) due to a significant ramp-up in spending and the emergence of alternative markets with momentum [13] - European markets, traditionally trading at a discount to the U.S., may have an opportunity to perform better due to their lower tech exposure [14]