The sector is being influenced by an 'AI-efficiency' narrative where layoffs and lean operations are currently being rewarded by the market.

Suggested as a 'short' position in a pair trade, acting as the source of funds for a rotation into energy due to the view that tech is overvalued.

Investors are rotating out of this technology ETF and into defensive sectors, a divergence last seen during the dot-com bust, signaling a major shift towards risk-aversion.