Strykr Analysis
NeutralStrykr Pulse 55/100. Tech is stalling, AI trade is wobbling, but political tailwinds offer some support. Threat Level 2/5.
The tech sector’s relentless run has finally hit turbulence. The AI trade, which has been the market’s golden goose, is showing signs of fatigue, and fintech’s political tailwinds are looking more like crosswinds. As of February 1, 2026, the Technology Select Sector SPDR Fund is stuck at $143.90, flatlining as traders digest a barrage of headlines. President Trump’s renewed focus on affordability has put fintech stocks in the spotlight, but the market is struggling to decide if this is a new growth catalyst or just another political sideshow.
The news cycle is a fever dream. YouTube pundits are pitching fintech as the next big thing, thanks to the administration’s affordability push. Meanwhile, Wall Street is quietly rotating out of small caps and into dividend payers, according to CNBC. The AI trade, once untouchable, is now under scrutiny after stock futures fell in tandem with silver and Bitcoin. The cross-asset sell-off has traders questioning the durability of tech’s leadership. Benzinga’s 'Stock Whisper' index is tracking names that investors are watching but not yet buying, a sign that conviction is fading. The S&P 500 closed January with a gain, but the engine room—tech and AI—has stalled.
Context is king. The tech sector’s dominance has been driven by a handful of mega-cap names riding the AI wave. But the rally has become increasingly narrow, with breadth deteriorating and small caps left in the dust. Fintech, once the market’s darling, is now a political football. President Trump’s policies could boost adoption, but regulatory risk is rising. The last time tech leadership wavered, the market saw a sharp rotation into defensives and value. The current environment is eerily similar, with dividend stocks and cash outperforming as traders de-risk.
The analysis is straightforward: tech is at a crossroads. The AI trade is wobbling, and the market is struggling to find new leadership. Fintech could benefit from political tailwinds, but the risk-reward is skewed by regulatory uncertainty. The technicals are uninspiring. XLK is stuck below resistance, and momentum is fading. The market is searching for a new narrative, but the old one is running out of steam. If tech can’t regain its footing, the broader market could lose its last pillar of support.
Strykr Watch
XLK is stuck at $143.90, with resistance at $145 and support at $140. Momentum indicators are flatlining, and breadth is deteriorating. The AI trade is losing steam, and fintech is in the political crosshairs. Watch for a break above $145 to signal renewed strength, but a drop below $140 could trigger a rotation into defensives. Dividend stocks are outperforming, and cash is king in this environment. The market is waiting for a catalyst, but the risk is that it comes from the downside.
Risks are everywhere. Political headlines could derail the fintech trade, and regulatory risk is rising. The AI trade is vulnerable to a sharp correction if earnings disappoint or momentum stalls. Tech’s narrow leadership is a warning sign, and a break below $140 in XLK could trigger a broader rotation out of growth. The market is on edge, and any shock could tip the balance.
But there are still opportunities. Longs can look for entries above $145 in XLK, targeting a move to $150 if momentum returns. Fintech stocks could benefit from policy tailwinds, but size positions carefully and watch for regulatory headlines. Dividend stocks and defensives offer relative safety, and cash is not a dirty word. For those with patience, a sharp correction in tech could set up a better entry for the next leg higher.
Strykr Take
Tech is no longer a one-way bet. The AI trade is wobbling, and fintech’s political tailwinds are not enough to offset rising risks. Stay nimble, respect the technicals, and be ready to rotate if leadership changes. The real opportunity will come when tech finds a new catalyst or the market resets. Until then, play defense and keep your options open.
Date published: 2026-02-01 23:15 UTC
Sources (5)
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