ETF Tracker StatSheet
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WHEN AI MEETS INTEREST RATES: THIS WEEK’S MARKET LESSON
[Chart courtesy of MarketWatch.com]
- Moving the market
Watching the markets, I’d say this week’s story was pretty simple: the AI trade finally met its toughest competitor… higher interest rates.
Money continued rotating out of AI and semiconductor names, with chip stocks taking another step lower and the broader AI basket finishing the week deep in correction territory.
What’s interesting is that this wasn’t a market-wide retreat. Financials held up well, the Dow actually gained ground for the week, and bond yields eased after Wednesday’s spike.
Meanwhile, investors were juggling hotter inflation data, $100+ oil, and a growing realization that the cost of capital matters a lot when future growth is the main attraction.
Gold and bitcoin ended the week largely unchanged, proving that sometimes the most exciting thing an asset can do is absolutely nothing.
The bigger question now is whether this is simply another healthy AI correction we’ve seen before, or the start of a longer reset in leadership.
2. Current domestic “Buy” Cycle (effective 5/20/2025); International “Buy” Cycle (effective 5/8/25)
Our domestic bullish cycle that began on November 21, 2023, concluded on April 3, 2025, following a market downturn triggered by President Trump’s tariff policy announcement.
This development caused significant declines across major indexes and broader market indices. However, markets subsequently rebounded, culminating in a new domestic “Buy” signal taking effect May 20, 2025.
Concurrently, our International Trend Tracking Index (TTI) experienced parallel volatility. On April 4, 2025, it breached critical thresholds, prompting a “Sell” recommendation. This position reversed as global markets recovered, with the International TTI regaining sufficient momentum to issue a new “Buy” signal effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
The AI trade took another hit today, dragging the major indexes into the red and even convincing the Dow to give back its early gains.
It was one of those sessions where sellers seemed to have the upper hand from the opening bell to the close.
While the major indexes finished the week lower, gold and bitcoin essentially treaded water, offering little drama for a change.
Our TTIs also moved lower, but by a much smaller margin than the broader market. The international TTI held up especially well, managing to stay just about flat.
Not every corner of the market got the memo to sell.
This is how we closed 10/16/2026:
Domestic TTI: +3.86% above its M/A (prior close +4.53%)—Buy signal effective 5/20/25.
International TTI: +3.55% above its M/A (prior close +3.71%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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