The Aerial Economy Soars In Tech’s Winter Blizzard

Good morning folks! Happy Tuesday.

Technology stocks are in rough shape. $XLK is down nearly 10% from its October 2025 all-time high, and feels like it wants to leak lower. 

Consumer discretionary closed at its lowest price since late-November. 

And we lost financials in yesterday’s tape. 

This week carries several potential catalysts // events that may provide directional momentum.

Tonight’s State of the Union, and earnings from NVDA, CRCL, CRM and others.

There are plenty of stocks pressing on new highs, but I am cautious. I prefer to trade tech stocks, when they trend higher. I mean, who doesn’t?!

Let’s walk through some visuals.

Tech looks ready to tumble. The group hasn't worked for months, and capital is being rewarded in other areas of the market. Look out below… 

Consumer discretionary is a similar story. More than 40% of this sector ETF is held in Amazon + Tesla. You can make the case these are actually tech stocks, but I’ll save it for another day. 

$XLY is down ~5% YTD and remains under pressure. 

On the flip side, consumer staples surged to all-time highs. $XLP is parabolic. Signs of risk-off appetite.

The financials flash warning lights. $XLF found its lowest close since June 20th, and I’m pessimistic about its near term price action. Life at the edge. 

Software is the talk of the town - a potential catalyst for greater unwind. $IGV closed BELOW its Software Sell-off on February 5th. 

And if we zoom out, the ETF is well-below its 2021 former highs. Not pretty.

Cybersecurity - aka specialized security software - is also in free fall… thanks AI.

Despite the somber action in stocks, the Aerial Economy’s innovators operate at full force! 

Seneca will provide the Aspen Fire Department with a five-aircraft Strike Team, delivering 5–10 minute wildfire detection and suppression under a five-year agreement.

And Anduril will advance the YFQ-44A autonomous fighter toward production at its Arsenal-1 facility, marking multiple prototype flights and signaling progress toward near-term deployment in the U.S. Air Force’s Collaborative Combat Aircraft program.

It’s great to see the Aerial Economy display relative strength during tech’s turbulent tape.

Per Aspera Ad Astra

P.S. Software is a great example of the effects of AI. But how will retail stocks be affected? Jeff Macke - Retail King - recently shared his perspective into how AI will change the retail landscape. Catch the replay here.

Disclosure: This is not financial advice.