This weekly trading update covers the major market shifts driven by artificial intelligence (AI) capital spending concerns. Markets are experiencing a significant repricing as investors realize that massive AI infrastructure investments may not pay off for all companies. The S&P 500 shows warning signs with a technical "Head and Shoulders" pattern forming, a classic chart signal that often comes before big price drops. The NASDAQ has already started falling while the Dow has held up better, creating a split in the market called a divergence.

Investors are increasingly worried that the huge amounts of money being spent on AI—over $700 billion this year alone by big tech companies—may be more than the market actually needs right now. This concern has triggered what experts call a "survival of the fittest" situation, where only the strongest companies will survive the competition. The market has also shifted its thinking about what rising interest rates mean, with higher rates now being seen as a sign of economic strength rather than weakness, completely reversing the old playbook.

Traders are watching specific price levels carefully. If the S&P 500 closes below 6,790, it could trigger a much bigger market drop. Meanwhile, some stocks that fell hard from their peaks are starting to look attractive to value hunters, with companies like NuScale Power offering potential buying opportunities after dropping 75% from its highs. The overall message is clear: the market is moving from blind excitement about AI to a more realistic view of which companies will actually win and lose in this new tech wave.