The Turning Point

Did last week mark a major turning point for the market? Detailed analysis below...

US stocks fell last week amid a continued rotation in market leadership.   

On the week, the S&P 500 finished -1.9%, NDX -3.7%, and RTY +1.7%.  This was the largest 5-day outperformance for the Russell 2000 vs. the S&P 500 on record (dating back to 1985).

Overall, the week was filled with painful undwinds and violent moves lower in Semis / Mega Caps / AI winners.  SOXX, the largest Semiconductor ETF, saw its largest outflows in 2+ years.

This was the theme of the week, as US equities saw their largest de-grossing since January 2021 (Meme Stock Mania), as Hedge Funds unwound risk for 7 straight days.  A good portion of the week’s selling was seen in funds/institutions reducing exposure to YTD AI winners.