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TECH TAKES CENTER STAGE AMID THE MARKET'S RECENT RISK-OFF ROUT

Big-cap tech is in the spotlight, but not because it's the star of the show. Instead, it's because its performance is being resoundingly panned.

Tech .SPLRCT, with a 6.8% loss, is the worst-performing S&P 500 sector so far this year (this compares to a SPX dip of about 0.7%). The group is also down 12.7% from its October 29 record close, and down 13.2% from its October 29 record intraday high.

With a more than 5% slide so far this week, tech is on track for its biggest weekly drop since early April of last year.

With a market cap of $19.05 trillion, tech accounts for 31% of the overall S&P 500's .SPX $61.44 trillion market cap. Therefore, as tech goes, so may the benchmark index.

And given that it accounted for 67% of the SPDR Growth Portfolio SPYG.P as of December 31, vs. 22% in the SPDR Value Portfolio SPYV.P, growth .IGX is on track for its worst week relative to value .IVX since early January 2022.

Of concern, the early 2022 relative collapse in growth vs. value came in the early stages of what would prove to be a bear market that year.

Meanwhile, on the charts, tech hit an intraday low of 5,276.91 on Thursday before ending at 5,294.95. With this, it tested its 200-day moving average $(DMA)$, which ended at 5,263.48.

Of note, from early 2023 to early 2025, the 200-DMA acted as good support amid numerous retreats. Tech's last finish below this closely followed long-term moving average was on May 9, 2025.

Additionally, the 14-day Relative Strength Index $(RSI)$ ended Thursday at 31.02, which is just above the oversold 30.00 level. Nevertheless, 31.01 is the RSI's lowest finish since a 24.08 reading on April 8, 2025. April 8 marked the low close in the early 2025 tariff-tantrum-induced market swoon.

With the Technology Select Sector SPDR Fund XLK.P quoted up nearly 2%, and e-mini Nasdaq 100 futures NQcv1 quoted up around 0.5% in premarket trade on Friday, tech appears poised for some relief at the open. That said, bulls will want to see the sector reclaim its 50-DMA, which is now a hurdle just shy of 5,665, to add confidence in a renewed advance.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

BANK OF AMERICA SAYS: 'STAY LONG DETROIT, SHORT DAVOS' CLICK HERE

BOE, ECB SET POUND AND EURO ON DIVERGENT PATHS CLICK HERE

EUROPE GETS A LIFT FROM DEFENCE, BUT AUTOS, AI-VULNERABLE SHARES FALL AGAIN CLICK HERE

FED UNDER PRESSURE AS LAYOFFS MOUNT CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)