S&P Tech Bulls Hit Pause as AI Tariff Exemptions Send Mixed Signals for XLK

If you’re the type who mainlines volatility and dreams in basis points, the last 24 hours in US tech should feel like a cruel joke. The Technology Select Sector SPDR Fund (XLK), that old warhorse of the S&P 500’s growth engine, has spent the session in a coma at $143.37, not so much as twitching despite a flurry of macro and sector headlines that would have sent algos into a frenzy in any other era. The market’s message? “We’re still deciding whether to panic or party.”

Let’s start with the news that should have mattered: The White House, in a move that’s equal parts geopolitics and Silicon Valley schmoozing, plans to carve out Big Tech giants like Amazon, Google, and Microsoft from the next round of chip tariffs. Reuters broke the story, and the logic is clear, don’t kneecap your own AI arms race when China’s already sharpening its knives. The market’s reaction? A collective yawn, at least as measured by XLK’s price action.

Meanwhile, the broader narrative is that US equities are expensive, the dollar is softening, and Wall Street’s buy-the-dip crowd is looking for bargains abroad. The Wall Street Journal says America’s lead over global markets is set to shrink, and that’s not just a macro theory, it’s showing up in flows. Yet, for all the hand-wringing about valuations, the S&P’s tech sector sits serenely, refusing to break either way. Is this the calm before a storm, or just the market’s way of saying “move along, nothing to see here”?

Zoom out and you’ll see that January’s cross-asset surge (+10.49% for commodities, +5.44% for global stocks) has left US tech looking less like the only game in town and more like the kid who brought a chessboard to a poker night. The AI profit narrative is alive and well, see Greg Ip’s WSJ piece on how technology is funneling more GDP to corporations and their shareholders, but the sector’s recent “skinny” phase (thanks, Seeking Alpha) has traders wondering if the easy money is gone.

Historically, periods of tech sector stasis have been followed by either violent breakouts (think Q2 2023’s AI melt-up) or nasty drawdowns (see Q4 2022’s post-peak hangover). The current backdrop, a US administration playing favorites with tariffs, a global search for value, and a market that’s already priced in perfection, feels precarious. The risk isn’t that tech collapses tomorrow. It’s that complacency has become the default setting, and that’s when the market usually finds a reason to wake up.

The technicals are no help. XLK is pinned at $143.37, with no sign of life. The RSI is stuck in the mid-50s, MACD is flatlining, and the 50-day moving average is converging with the 200-day like two drunks at last call. Support is visible at $140, with resistance at $146. Volume is anemic. It’s as if everyone is waiting for someone else to make the first move.

Strykr Watch

Here’s what matters for the next leg: Keep eyes glued to $140 as a line in the sand. A break below opens the door to a swift move down to $135, where the last real volume cluster sits. On the upside, $146 is the level to beat. If XLK can clear that with conviction, you’re looking at a run to $150 and possibly new highs if the AI narrative catches another tailwind. For now, the sector’s volatility rating sits at Strykr Score 38/100, low, but with the potential for sudden spikes if macro or regulatory news actually hits the tape.

The biggest risk? That the market’s complacency is masking a buildup of positioning that could unwind violently. If China retaliates on chips, or if the US dollar suddenly finds a floor, you could see a sharp rotation out of tech and into value, commodities, or even (gasp) European stocks. On the other hand, if the AI narrative gets a fresh catalyst, think blockbuster earnings or a regulatory green light, XLK could rip higher before the bears even know what hit them.

For traders, the playbook is simple: Fade false breakouts, respect the range, and don’t get cute with leverage until the tape shows its hand. If you’re long, use $140 as your stop. If you’re short, don’t get greedy below $135. The real money will be made when the market finally picks a direction.

Strykr Take

This is the kind of market that punishes boredom and rewards patience. If you’re looking for fireworks, you’ll have to wait. But when the fuse finally lights, whether it’s tariffs, AI, or a global rotation, the move will be fast and unforgiving. For now, keep your powder dry and your stops tight. The next big trend in tech is coming, but it won’t announce itself with a press release.