The Next Two Weeks Could Redefine Tech

There’s always something at risk when it comes to investing. But right now, it is definitely smart to keep your eyes open for major market disturbances.

With the risk-reward balance in the U.S. equities market stabilizing, Wall Street has entered a pivotal stretch over the next 14 trading sessions that may determine its near-term direction. In a span often defined by uncertainty, key economic data and Fed policy will weigh heavily on investor sentiment.

No sector is more vulnerable than tech.

What’s happening in the next two weeks?

Investors will navigate a dense calendar featuring the latest employment figures, a critical inflation gauge, and the Federal Reserve’s interest-rate decision, each offering clues about the path of monetary policy.

Bloomberg posits that these events may crystallize Wall Street’s path for the remainder of the year.

Tech in the spotlight

Nowhere is the market’s vulnerability more visible than in technology stocks, which have driven much of this year’s advance.

The so-called “Magnificent Seven” account for more than 30% of the S&P 500’s weighting. Their performance in the coming two weeks could dictate whether the broader market weathers potential shocks or stumbles.

Recent earnings have underscored both resilience and risk. Nvidia, for instance, posted record quarterly revenue on the back of AI demand, but analysts warn its lofty valuation leaves little room for disappointment. Apple’s iPhone cycle and cloud revenues at Amazon and Microsoft will be closely watched, with any softness potentially magnified across the index.

History suggests volatility in tech can quickly ripple outward. In September 2020, a sharp pullback in mega-cap tech erased trillions in market value in a matter of weeks. This year, valuations again look stretched: The NASDAQ trades near 30 times forward earnings, well above its long-term average.

If it is calm now, why worry?

Equity markets remain unusually tranquil. The S&P 500 has not suffered a 2% drop in 91 straight trading sessions, the longest stretch since July 2024. Meanwhile the the VIX volatility index has stayed below the 20 threshold nearly without interruption since late June.

Thomas Lee, head of research at Fundstrat Global Advisors, warns that while a correction is plausible, calling for a 5% to 10% pullback in the fall. But the index could still rebound toward 6,800 to 7,000 points by year-end, The Economic Times Reports.

“Investors are assuming correctly to be cautious in September,” Lee told Bloomberg. “The Fed is re-embarking on a dovish cutting cycle after a long pause. This makes it tricky for traders to position.”

Seasonal risks and overvaluation

September is historically one of the weakest months for stocks. Bloomberg notes that over the past three decades, the S&P 500 has averaged declines in September, falling in four of the last five years, adding weight to the caution.

Moreover, the index trades at approximately 22 times forward earnings. That is a valuation level seen only during the dot-com bubble and the post-pandemic tech frenzy.

“We’re buyers of big tech,” Tatyana Bunich, president and founder of Financial 1 Tax, told Bloomberg. “But those shares are very pricey right now, so we’re holding some cash on the sidelines and waiting for any decent pullback before we add more to that position.”

Summary Table: Market Dynamics at a Glance

So does the risk outweigh the return?

The message from Wall Street’s data-driven bull is clear: remain cautious in the short term, even as optimism for a year-end recovery holds.

The unusual calm in volatility may be lulling investors into complacency, setting the stage for a sudden selloff if data or the Federal Reserve defy expectations. But if the policy outlook turns favorable, markets may resume their march upward.

This two-week window is shaping up less like a routine market cycle and more like a crossroads split between correction and breakout.

“I expect this stock rally to stall soon,” famous bull Ed Yardeni of Yardeni Research, told Bloomberg.

“The market is discounting a lot of happy news, so if CPI is hot and there’s a strong jobs report, traders suddenly may conclude rate cuts aren’t necessarily a done deal, which may lead to a brief selloff,” he said. “But stocks will recover once traders realize the Fed can’t cut rates by much because of a good reason: The economy is still strong.”