US equities (^GSPC, ^DJI, ^IXIC) are slightly rebounding after facing a multiple day sell-off, mostly in the tech sector. Questions around the strength of the tech sector and AI plays begin to arise as it faces volatility and a potential rate cut from the Federal Reserve.
UBS Investment Bank US equity derivatives strategist Max Grinacoff joins Catalysts to give insight into what’s next after the sell-off that the tech sector has faced.
“Typically what you’ve seen historically is you’ve seen volatility or the VIX (^VIX) rise into Fed rate cut cycles historically and retrace thereafter, unless again accompanied by recession…We do think volatility ultimately fades a little bit from here, unless the data really continues to sour”, says Grinacoff.
He continues with: “But we do think it’s going to take a few weeks to do so, and our models are suggesting, that again, the data is going to be very pertinent over the next couple of weeks in terms of kind of continuing to see a retracement back to normal.”
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