# Tech fear hits a 2-decade high while big banks pass stress tests with flying colors — rotate into financials

_AI-generated trading idea · LONG · GS, JPM, XLF_

> Canonical page: https://commonquant.ai/research/for-you/tech-fear-hits-a-2-decade-high-while-big-banks-pass-stress-t--a02196b3-3b0d-4b4b-8c25-1c960bcb24ab

Big banks just got a clean bill of health from the government and are preparing to return billions to shareholders, while at the same time, technology stocks are experiencing their highest level of fear in two decades. This divergence suggests investors should rotate away from the volatile tech sector and into stable, financially strong bank stocks.

## Idea

The market is currently experiencing a historic level of fear specifically concentrated in the technology sector, with a key tech 'fear gauge' nearing a two-decade high and driving a massive sell-off. In stark contrast, the Federal Reserve's stress test just confirmed that all 32 large banks are incredibly safe, directly leading JPMorgan to announce a massive $50 billion buyback and Goldman Sachs to raise its dividend. When tech fear spikes to these extremes, capital typically rotates into sectors with the strongest balance sheets and clearest return of cash to shareholders. Supported by the broader trend of smaller, non-tech companies booming this year, initiating a long position in top-tier bank stocks offers a high-probability shelter from the tech volatility.

## What happened since

- **GS** · LONG · T+1 -3.3711% · T+5 -5.0437% · T+20 6.9859%
- **JPM** · LONG · T+1 -1.8113% · T+5 -2.3245% · T+20 3.4704%
- **XLF** · LONG · T+1 -0.1863% · T+5 3.6333% · T+20 5.8133%

_Price changes since publication; updated 2026-07-16T03:07:23.779473+00:00._

## Key details

- Symbols: GS, JPM, XLF
- Timeframes: D1
- Tags: \#banks, \#rotation, \#defensive, \#macro

## Community

- Upvotes: 11
- Views: 0
- Copies: 0
- Cosigns: 0

## News sources

- [This tech ‘fear gauge’ is nearing a two-decade high. Investors should worry.](https://www.marketwatch.com/story/this-tech-fear-gauge-is-nearing-a-two-decade-high-investors-should-worry-691ed639?mod=mw_rss_topstories) — MarketWatch
- [JPMorgan Chase unveils $50 billion buyback, Goldman Sachs raises dividend after Fed stress test](https://www.cnbc.com/2026/06/24/jpmorgan-goldman-sachs-fed-stress-test.html) — CNBC
- [Small caps are booming this year. Here are Wall Street's top smaller picks](https://www.cnbc.com/2026/06/25/small-caps-are-booming-this-year-here-are-wall-streets-top-picks-.html) — CNBC

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