Weekly Watch: Technology Slides as Gold and Silver Strengthen

This Week’s Rotation

Technology and industrials weakened sharply over the past trading week, while precious metals, consumer defensives and long-duration Treasuries moved higher.

Equity Markets

The major U.S. equity indices diverged over the past trading week.

The S&P 500 declined 1.13% and the Nasdaq 100 fell 3.11%, while the Dow Jones Industrial Average was essentially unchanged at +0.02%.

The gap between the Nasdaq and Dow provides the first indication that the weakness wasn’t distributed evenly across the equity market.

Sector Rotation

Technology experienced the largest decline among the major sectors tracked in Weekly Watch, falling 5.35%.

Industrials also weakened considerably, declining 4.07%. Airlines fell 3.31%, while Banks declined 3.00%.

Several other areas moved in the opposite direction.

Consumer Defensive gained 3.12%, Biotech rose 2.70%, and Consumer Cyclical advanced 1.66%. Financials also finished higher at +1.14%, despite weakness in the more narrowly focused bank ETF.

The result was considerable dispersion within equities rather than uniform weakness.

Commodities

Precious metals produced some of the strongest gains in this week’s table.

Gold advanced 5.71%, while Silver gained 4.81%.

Natural Gas rose 3.31%, Uranium gained 1.41%, and Oil advanced 0.97%, helping Broad Commodities finish 1.23% higher.

This marked a significant change from the previous Weekly Watch, when gold and silver had gained only 0.55% and 0.16%, respectively.

Bonds & Currencies

Long-duration Treasuries gained 1.60% as TLT moved in the opposite direction from the S&P 500 and Nasdaq.

The U.S. Dollar declined 0.53%, while the Euro gained 0.83% and the Japanese Yen was nearly unchanged at +0.20%.

The combination of stronger Treasuries, higher precious metals and a weaker dollar stands out against the weakness in technology.

Intermarket Perspective

The major change over the past trading week occurred in the location of market leadership.

Technology had gained 2.37% in the previous Weekly Watch. In the current snapshot, it declined 5.35%.

Precious metals moved in the opposite direction. Gold accelerated from +0.55% to +5.71%, while Silver moved from +0.16% to +4.81%.

Long-duration Treasuries also strengthened as the Nasdaq and S&P 500 declined.

These movements produced a distinctly different leadership mix: technology and industrials weakened while precious metals, defensive equities and bonds gained ground.

What I’ll Be Watching Next

The first question is whether Technology’s sharp decline develops into continued relative weakness or proves temporary after its recent strength.

Precious metals are also important to follow. Gold and silver accelerated considerably after much smaller gains in the previous Weekly Watch.

I’ll also be watching the relationship between equities and Treasuries. TLT strengthened as the S&P 500 and Nasdaq declined over the past trading week; whether that divergence continues could provide useful information about the next phase of cross-asset rotation.

Finally, Consumer Defensive strength deserves attention. Its 3.12% gain, occurring alongside significant weakness in Technology and Industrials, makes the sector rotation particularly notable this week.

Educational only. Not investment advice.