S&P 500 Slides as AI Uncertainty Weighs on Markets

| By Harry Boxer, Technical Market Analyst

AI Narrative Pressures Markets Again

Last week the major U.S. stock indexes fell around 1% to 2% as shifting narratives about AI prospects and technology stocks continued to drive the broader market. For the S&P 500, it was the fourth negative week out of the past five, although the previous declines were all less than 1%.

The week ended with net declines in the S&P 500 (-1.57%) Nasdaq (-2.03%) Market volatility has started to pick up over recent weeks. This has been led by selling across the mega-cap technology companies, with the Magnificent 7 down another 2% last week, taking losses in 2026 to near 7%.

Broader Spillover and Risk Rotation

Last week we saw signs of broader spillovers from this weakness as investors start to price disruptions from AI across other parts of the corporate sector, highlighted by sell-offs in financial services and insurers, real estate and even trucking and logistics.

Thus far, these fears are speculative and seemingly represent a shift toward choppier trading in risk markets broadly. Last week’s sell-off included other risk assets like cryptocurrencies and precious metals, while we also saw a push into more “safe haven” like assets, such as U.S. Treasury bonds and defensive equity sectors such as utilities.

Key Technical Levels to Watch

Technical chart levels to closely monitor going forward are: S&P 500 support near 6780 & then the 6722-30 zone. If violated, look for 6630-35 & 6520-25 levels as poss lower level support zones SPX resistance exits near 6880 then formidable resist with several tops near 7000. If they should manage to get a thrust past that ,a surge to 7140-45, possibly 7225-50 could take place!

In any case, as we always do at the techtrader.com ,we’ll “Trade What We See, Not What We Think”

HARRY BOXER
THE TECHNICAL TRADER