Tech Sell-Off Marks 'Crisis of Confidence,' Says Jordan Jackson

Current equity market valuations offer a strategic entry point as tech stocks trade at a 25% discount relative to the start of the year, signaling that many macroeconomic risks are already priced in. While a "crisis of confidence" has triggered recent consolidation, robust demand visibility for hyperscalers through 2028 and 50% growth in cloud revenues support a bullish long-term outlook for the AI trade. Concerns regarding circular financing—where sellers finance their own buyers—are largely overblown due to a broadening customer base of "neoclouds" and new market entrants. Beyond technology, healthcare serves as a defensive diversifier, while strong earnings in industrials and financials suggest a resilient cyclical backdrop. However, a widening gap between wage growth and inflation creates a bifurcated economy where upper-income households drive consumption through the wealth effect, while lower-income consumers face increasing financial pressure. The Federal Reserve remains likely to implement one or two more rate hikes depending on how quickly inflation base effects moderate in the second quarter.