Mark Newton Advises Buying Tech Declines While Spreading Risk

Investors should use the current technology pullback as a buying opportunity while maintaining a balanced portfolio, according to Fundstrat’s Mark Newton. CoreWeave, an artificial intelligence cloud provider whose stock was down 15% at one stage, still has to contend with higher bond yields on its debt.

The equal-weight S&P 500, a version of the index that assigns the same weight to each constituent, declined by roughly 6%. The main S&P 500, in contrast, had reached a record high only seven trading days before the interview took place.

Does the Tech Selloff Represent a Buying Opportunity or an AI Red Flag?

Newton, Fundstrat’s global head of technical strategy, said in an interview with CNBC that rotation has defined 2026.

Healthcare equities have only recently climbed to record levels. The rotation started with an energy rally of nearly 40%, then shifted into technology.

Over the past month, Newton noted, volatility has risen across asset classes.

Technology fell sharply last week, although in Newton’s assessment it has surrendered only a small part of September's advance.

He still believes investors require diversification to navigate the changes happening between sectors.

Will AI Returns Continue to Outpace Borrowing Costs?

CoreWeave’s stock moved back into positive territory on Thursday after its earlier decline. Concerns remain about the level of debt the company requires to finance its AI buildout.

Chip and memory stocks stayed soft in the meantime, with Seagate, Western Digital, Intel and South Korean chipmaker SK Hynix all among the laggards.

Confidence in the returns AI can generate has helped stocks hold up in the face of rising bond yields, said Steve Sosnick, chief strategist at brokerage Interactive Brokers.

If market participants really thought the earnings potential was unlimited, he noted, paying 9% or even 20% to finance it would make little difference.

Yet Sosnick sees CoreWeave as evidence that doubts over those returns may begin to emerge.

Index funds tied to the S&P 500 hold 45% or more in technology, in Sosnick’s estimation.

Should tech shares be sold, he cautioned, selling in ETFs and index funds could follow and reinforce a negative momentum trade.

“we are all heavily invested in AI whether we want to be or not.”

Steve Sosnick, chief strategist at Interactive Brokers, speaking on CNBC

With tech’s weight at 45%-plus, Sosnick’s numbers tie the performance of index funds to AI returns exceeding the cost of borrowing.