# AI-led rally shows cracks as Soloway sees possible S&P reversal after 8,000

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/investing/31516
Published: 2026-10-13T21:00:30.000Z
Updated: 2026-10-13T21:00:30.000Z
Section: Investing

> Gareth Soloway said the AI-led U.S. stock rally is showing cracks as money rotates away from key names, though lower oil and yields could still lift the S&P toward 8,000 before weakness emerges.

The AI-led rally that has driven U.S. stocks is showing signs of strain as money rotates away from key growth names and investors reassess future supply. Lower oil prices and yields could still push the market higher in the near term, but concerns over a weaker economy may then take over.

In an Oct. 13 Schwab Network interview, Gareth Soloway, chief market strategist at Verified Investing, said technical signals suggest the 10-year Treasury yield may be near a short-term peak, while the AI trade is beginning to show signs of capital outflow.

Soloway said both the daily and weekly charts for the 10-year yield had formed topping-tail patterns, which he described as bearish reversal signals. He said that when a daily signal appears in the same week as a weekly topping tail, the move tends to carry a higher probability of downside, with yields potentially pulling back to 5% or just below in the near term.

The longer-term rate backdrop remains a concern, he said. Given the U.S. debt burden, Soloway said yields are unlikely to return to COVID-era lows, with a longer-term floor likely at 4% or higher and the possibility of higher yield peaks over time.

As evidence of stress in the AI trade, Soloway pointed to recent rotation out of stocks such as Micron and SanDisk and into older consumer names including Nike, which he said has continued to rise after weak earnings. He also cited China’s advanced chip development and new production capacity expected from late 2027 into 2028 as factors that could be priced into AI-related shares in advance.

Soloway said Chinese technology stocks could be an undervalued area. He said he had started putting money into Baidu and Alibaba at current levels, arguing that heavy inflows into the U.S. AI trade had left other regions underinvested. Even a partial rotation, he said, could give Chinese names a strong lift.

The S&P still has room for near-term upside, in his view. Soloway said a combination of lower oil prices and lower yields could help the index break resistance around 7,800 and move toward 8,000. At that level, however, he said a major long-term trend line would act as resistance, and the market narrative could shift toward economic weakness.

Soloway said recent market warnings should not be dismissed. He said warnings typically arrive early and are often ignored before larger shocks appear. Still, he said the Federal Reserve, the government and AI-related spending continue to provide buffers, making 10% to 20% corrections more likely for now than a 2008-2009-style collapse.