Tech Traders Got Nervous 😬

The WSJ just reported the highest price ever paid for modern art at auction.

While equities, gold, bitcoin hover near highs, the art market is showing signs of early recovery after one of the longest downturns since the 1990s.

Here’s where it gets interesting→

Each investing environment is unique, but after the dot com crash, contemporary and post-war art grew ~24% a year for a decade, and after 2008, it grew ~11% annually for 12 years.*

Overall, the segment has outpaced the S&P by 15 percent with near-zero correlation from 1995 to 2025.

Now, Masterworks lets you invest in shares of artworks featuring legends like Banksy, Basquiat, and Picasso. Since 2019, investors have deployed $1.25 billion across 500+ artworks.

Masterworks has sold 25 works with net annualized returns like 14.6%, 17.6%, and 17.8%.

Shares can sell quickly, but my subscribers skip the waitlist:

Skip waitlist

_{*Per Masterworks data. Investing involves risk. Past performance not indicative of future returns. Important Reg A disclosures: masterworks.com/cd}

Wall Street kicked off the week by spilling coffee on the keyboard. Messy, jittery, and mildly irritating.

Big early swings. No conviction. Just vibes.

By the close:

Not a crash. Not a rally. Just… meh.

Here’s the plot twist:

This wasn’t a “market bad” day. It was a “tech, go sit on the naughty step” day and it made everyone look bad.

The AI hype train didn’t derail but it did tap the brakes.

Big names tied to the AI frenzy like $ORCL ( ▼ 2.66% ), $CRWV ( ▼ 7.94% ), and $AVGO ( ▼ 5.59% ) kept sliding. Money is rotating out of:

AI stocks went from “the future of humanity” to “maybe chill for a sec.”

And with inflation and growth uncertainty lurking, volatility might start acting like it just drank three Red Bulls.

While stocks argued, bonds whispered.

Small moves. But still a signal that the market isn’t exactly pounding the “higher forever” drum right now.

The Empire State Manufacturing Index came in at -3.9.

Wall Street expected +10.

That’s not a close miss. That’s like showing up to a party on the wrong day.

Manufacturing isn’t collapsing… but it’s definitely not throwing confetti either.

According to portfolio managers:

Important nuance here. This isn’t “tech is dead.”

It’s more like “tech ran a marathon and is taking a water break.”

Longer term, pros still expect tech to lead but valuations are doing a lot of heavy lifting right now.

The big question heading into 2026:

Are investors still cool paying premium prices for AI promises that haven’t fully shown up yet?

Because a lot of stocks are priced like the future already happened… and arrived early.

A couple standouts:

Proof that stock-specific news still matters… even when the market’s indecisive.

Not panic. Not euphoria. Just the market changing lanes.

1. Rotate Out of Crowded AI, Not Tech
The AI trade isn’t dead. It’s just overcrowded. Money is quietly rotating out of “priced-for-perfection” names into less-loved areas.
📌 Action: Trim exposure to stretched AI plays. Reallocate into non-AI tech or value-heavy ETFs like $VTV ( ▲ 0.38% ) or $SCHD ( ▲ 0.29% ) while the rotation plays out.
Same market. Less hype. Lower stress.

2. Buy Defensive Growth on Weak Days
Health Care led while tech lagged. A classic sign of investors playing defense without going full bunker mode.
📌 Action: Gradually add to healthcare leaders or ETFs like $XLV ( ▲ 1.32% ) on red days. These tend to hold up when growth wobbles but still participate when markets recover.
Boring pays when chaos shows up.

3. Keep Dry Powder for AI Pullbacks
Pros still expect tech to lead long-term just not at today’s nosebleed prices. Volatility = opportunity.
📌 Action: Hold extra cash and set limit buys on quality AI-adjacent names after selloffs, not on green hype days. Let the market come to you.
Future gains go to the patient, not the loud

On Monday, iRobot filed for Chapter 11 bankruptcy.

Yes. That iRobot. The Roomba people.
The robot that bonks into your couch like it’s had two margaritas.

Let’s rewind ⏪

iRobot was born in 1990, spun straight out of MIT’s AI labs.

Founders:

Their original mission wasn’t “clean Karen’s kitchen.” It was robots for jobs humans hate:

Think NASA, DARPA, military research. Not pet hair. Throughout the ’90s, iRobot built:

All the nerdy stuff that eventually became… a plastic hockey puck that eats crumbs.

In September 2002, iRobot launched the Roomba.

It wasn’t just a gadget. It was a moment.

Wall Street noticed. IPO in 2005

For a while, iRobot was consumer robotics.

In 2016, iRobot made a bold move:

They sold their Defense & Security division for ~$45M. No more military robots. They’re a vacuum company now

High conviction. High risk. Very Shark Tank energy.

Then came the dream exit. Amazon agreed to buy iRobot for ~$1.7B.

Retail investors popped champagne. Synergies were whispered. Alexa-powered Roombas loomed. But regulators said:

“Yeah… no.”

EU antitrust watchdogs worried Amazon would:

After two years of scrutiny, the deal collapsed in January 2024.

Cue sad trombone 🎺

Once the Amazon lifeline vanished, reality hit fast.

iRobot went through:

And now?

Shares reacted accordingly.

IRBT stock:

From category king to penny-stock vibes.

This is a cautionary tale for:

Robots are hard. Margins are thin. And Big Tech regulators are not in a cuddly mood.

The robot that cleaned your house just couldn’t clean up its balance sheet.

Trump says he’s “very strongly” considering an Executive Order to move marijuana from Schedule I (aka “heroin tier”) to Schedule III under the Controlled Substances Act.

Cannabis might finally stop being treated like Pablo Escobar’s side hustle.

Right now, marijuana sits in Schedule I, alongside drugs that are supposedly:

Schedule III is different. That’s where things like ketamine and steroids hang out. Still regulated but acknowledged as having medical value.

In finance terms: This isn’t legalization… but it moves the goalposts.

Here’s the sleeper headline:

Cannabis companies currently get crushed by IRS Rule 280E, which:

Move cannabis to Schedule III and suddenly:

Same business. Same weed. Way better math.

Trump’s comments follow a December 11 report suggesting this move was already being discussed behind closed doors.

So this isn’t a “thinking out loud” moment. It’s more like: “We’ve been cooking this for a while.”

Multi-state operators (MSOs) aka the companies already running legal cannabis businesses across the U.S.:

These names have been living in regulatory purgatory for years. Schedule III could be the closest thing to oxygen they’ve had since inception.

Cannabis ETFs also get a glow-up if tax pressure eases:

Think of these as “I want exposure, not a headache.”

This doesn’t:

But it does:

In market terms: Lower friction = higher potential valuations.

Sometimes the biggest rallies start with boring legal changes.
This might be one of those times.