In these uncertain times, at least there’s one thing investors can count on – the continuing skyward climb of the tech sector. Oh, wait. As Erik Smolinski explains on this week’s episode of Ask Urvin, tech hasn’t just struggled of late. It’s also been dragging everything down with it. Speaking on Wednesday, Erik pointed out that “If we measure where we are in terms of a pullback on the S&P 500, we're still within 5%.” “For those that don't know,” Erik adds, “the market spends the overwhelming majority of its life within 5% of all-time highs, so this still places us within a generally healthy pullback region.” Not only that, but by week’s end, the markets once again whipped back the other way. After a generally rough week, all three major indices surged into the closing bell on Friday. Still, there is a bigger picture here that largely concerns the tech sector. As markets falter on Wednesday, Erik pointed out “that this pullback is largely being driven by tech.”Naturally, we’ve grown accustomed to the exact opposite trend over the last several years. And if you stand back for a look at the whole year, that still seems like it could be true. As Erik points out, the 12-month outlook suggests that tech is still one of the strongest sectors in the markets. “In a one year performance trend,” Erik says. “Tech is third.”But what happens when we zoom in? “Let's go to six months. All of a sudden, tech is third from the bottom,” says Erik. “When you see big shifts like that, that's actually telling you something about the momentum of the underlying sector.”Now let’s see what happens when we go in for an even closer look. “Let's look at three months,” said Erik. “Oh shit, tech is now net negative, and it is dead last by a wide margin.”At one month? “Dead last, again,” says Erik. “This recent move in tech clearly has come online over the last six months or so, and it's really been accelerating in the near term,” Erik notes. “And a lot of this weakness is coming from a small number of names.” Erik highlights the recent downtrend for big-time tech players including Microsoft, Oracle, and AMD. As we close in on the end of a bumpy week, it may be time to acknowledge the possibility that the tech sector is overvalued, and we’re starting to see the cracks. Consider Palantir, an AI leader whose revenue comes almost entirely through government and military contracts. Just six months ago, Palantir was trading at a P/E ratio of $454, which means that investors were paying $454 for every $1 of the company’s current annual earnings. From the perspective that AI stocks are insanely overvalued, the pullback that we’re seeing in the tech sector right now makes a lot of sense. And, says Erik, “This type of pull back, has a higher probability of continuation to the downside versus not, at least in the near term.” On the bright side, maybe some of these overvalued tech stocks will start to behave more rationally. Let’s find out.

The Big 3Monday, February 2, 2026 A quick look at the top stories we’re following this week.S&P 500 Quarterly Earnings are beating expectations. With more than 160 large-cap companies reporting financial results so far this season, earnings are up 15.3% and sales are up 7.4%.Crypto stocks are down following a rough weekend for Bitcoin.The largest cryptocurrency hit $74,553, its lowest intraday level since April 7, 2025.Morgan Stanley predicts heightened Treasury volatility Under new Fed Chair. The investment bank anticipates that a Federal Reserve led by Kevin Warsh would create greater volatility due to the central bank’s reduced public communications.This week’s Company Earnings Announcements at a glancePalantir Technologies Inc. (PLTR)--Monday, 2/2Merck & Co., Inc. (MRK)--Tuesday, ⅔PepsiCo, Inc. (PEP)--Tuesday, ⅔Advanced Micro Devices, Inc. (AMD)--Tuesday, ⅔Pfizer (PFE)--Tuesday, 2/3Alphabet Inc. (GOOG)--Wednesday, 2/4Eli Lilly and Company (LLY)--Wednesday, 2/4Amazon.com, Inc. (AMZN)--Thursday, 2/5Shell plc (SHEL)--Thursday, 2/5Toyota Motor Corporation (TM)--Friday, 2/6Phillip Morris International Inc. (PM)--Friday, 2/6

This week, it was finally revealed that Kevin Warsh would be tapped to succeed Jerome Powell as Chair of the Central Bank. In addition to being the youngest person ever to serve on the Federal Reserve Board of Governors, he is also the son in law of a billionaire GOP donor who attended school with President Trump in the 1960s. The beauty of this choice is truly in the eye of the beholder. We’ll reserve judgement – first, until he is actually confirmed by Congress; and second, if and when we see whether he cares to protect the Fed’s independence. For now, Jerome Powell remains embattled but firmly in control until his term expires on May 15. Indeed, this week marked the Fed’s first meeting since the Department of Justice announced its criminal investigation of Powell last month. Powell has characterized the investigation as part of President Trump’s ongoing effort to strongarm Fed policy-making. So is Powell caving to the pressure? As Erik Smolinski told us on this week’s episode of Ask Urvin, “It was overwhelmingly expected that there would be no interest rate change. And shocker, that's exactly where we're at.”Erik points out that the S&P showed little to no volatility following the Fed’s announcement. Despite the president’s pressure campaign to force lower rates, the markets seem unsurprised by the decision. “Looking ahead,” says Erik, “you can see that for the 18 March expiration, there’s about an 88.6% probability that we stay at 3.50-3.75%. The point is, this is where we're chilling for a little bit.”So if you’re wondering when another cut might be on the table… Erik also highlighted some pretty fascinating trends in the healthcare sector this week. “Health care has been hovering near six month highs comfortably, but today the whole sector had a fair gap down inside the trading day,” Erik pointed out. Using the AskUrvin chat app to drill down a little deeper, Erik pointed to particularly high volatility in the biotech industry.“That’s exactly how it goes with biotech,” says Erik. “It lives and dies by the news cycle.” “There’s opportunity in that,” says Erik. Of course, there is also peril. “There's a big focus in biotech on CalciMedica (CALC),” said Erik, “which dropped 72% – the old intraday, 72% move.”Yeah. So what happened there? We decided to Ask Urvin.