For all the negativity once again the overall decline in the S&P 500 was only 2% for the week. Up until the last two days, when things have started to get a bit more dynamic, it has been a methodical slow grind lower. The equal-weight version of the index ended down less than 1% while small/midcap indices ended the week modestly higher. The escalation of the Iran conflict over the last month diverted investor attention from the building AI-Anxiety. That returned again this week once again at the hands of Claude and as you may have already surmised by the headline index performance tech was the main source of weakness.

The weakness within tech was pretty broad driven by some sector specific headlines. Starting with the AI-disruption - Anthropic had a new release that allows users to enable Claude to use their computers to complete tasks from their phone. There was also a leak of a new Claude model codenamed “Mythos”. The new tier of models reportedly achieves higher scores in software coding, academic reasoning, and cybersecurity-related tasks compared to Claude Opus 4.6. This weighed broadly on software and cybersecurity stocks today. The Communication Services (-7%) got clubbed this week, like Paul Skenes, after Meta and Alphabet traded sharply lower following a landmark ruling in a social media addiction case. However, other media and telecom stocks ended the week with gains.

The S&P 500 is down five weeks in a row and about 9% off the all-time high. This week the index also definitively broke below the October/November lows (~6,550). We are starting to get to oversold levels but not wildly so. The daily RSI is starting to move under 30 but we are not oversold on a weekly basis yet. The daily ranges are also starting to increase which suggests we are at least getting closer to a technical bounce. The key will be how the market reacts after any relief rally as we test that 6,550 level.

The situation in the Middle East remains front and center. For next week, Tuesday is the final day of the quarter so keep an eye out for some rebalancing over the next week. The economic data starts to pick up including the ISM surveys and retail sales. The jobs report is out on Friday but now for the positive part of this note.....markets are closed! So go enjoy the Spring weather, some baseball and the Sweet 16.