Continued cooling of the US economy may further weaken the rise in technology stocks.

Recently, Bank of America analyst Michael Hartnett (Michael Hartnett) said in the latest report that signs of economic slowdown will push investors to switch to stocks other than technology stocks, and they are optimistic about the bond market in the second half of the year.

The report notes that recent data indicates that the global economy has fallen into a “sick state” and that large technology stocks will gradually lose their dominant position:

“We're only one bad non-farm report from big tech stocks losing their dominance.”

Against the backdrop of high expectations of interest rate cuts and rising concerns about AI returns, capital began to shift from large technology stocks to small capitalization stocks. Market data shows that since the all-time high on July 10, the market value of NASDAQ 100 companies has evaporated by 2.6 billion dollars.

However, the report said that stock market bulls are still convinced that this wave of correction is “healthy” because the stock market has not yet fallen below the key support level — the NASDAQ 100 index has accumulated a cumulative decline of about 9% since July 10, but has continued to rise by more than 30% since its low in October last year.

For the week ending July 24, the Bull and Bear Index compiled by Bank of America rose slightly to 6.9, the highest level in more than three years. Generally speaking, when this indicator rises to 8, it indicates that the stock market has “gone too far”, triggering a “sell signal.”

Hartnett said that if fund managers' stock allocations increase, cash levels decline further, and the rebound of backward stocks leads to an improvement in market breadth, this signal will be triggered.