By Martin Baccardax

U.S. stock markets have been struggling to break out of their recent plateau, with the S&P 500 still largely unchanged over the past month as a healthier level of gains from sectors beyond tech limits gains for the benchmark and weighs on overall performance.

Tech staged a bit of a comeback on Monday, with Nvidia gaining 2.5% and Microsoft rising 3.1% amid a rebound in some of the market's biggest names and solid session for beaten-down software stocks led by a near 10% advance for Oracle.

But the market's broader performance this year remains characterized by the ongoing rotation into non-tech sectors such as consumer staples, industrials, materials, and energy, all of which have booked strong 4%-plus gains over the past week and double-digit percentage advances since the start of the year.

That's helped the market weather the pullback in tech, which has seen an index of the so-called Magnificent Seven megacaps fall 3.1% since Jan. 1, and all three sectors tied to the tech trading lingering in the red.

But it's also kept the S&P 500 locked in a recurring pattern of gains and retreats, with the benchmark reclaiming record highs but not pushing further into "breakout" territory with a sustained push past 7000.

"The broader tech complex remains rangebound until it can decisively break above the December highs," said Adam Turnquist, chief technical strategist at LPL Financial, who argued that the software sector "could be the swing factor for a breakout or a breakdown in tech."

"For the broader market to make sustainable progress, renewed tech participation will likely be essential," Turquist said. "We expect the S&P 500 may have difficulty clearing the 7,000--point milestone without stronger contributions from the tech sector -- especially from software."

The iShares Expanded Tech-Software Sector ETF remains deeply in the red, down nearly 20% over the past month and trading near levels last seen during the Liberation Day selloff in April 2025.

The S&P 500 Software and Services index has fallen 15.7% over the past month, as well, and was trading near its April 2025 trough.

There's a paradox, however, in looking for the software sector to support a market which is itself supported by an underlying faith in the artificial- intelligence-investment boom.

"It 's probably a positive sign for AI demand if investors think it will so significantly disrupt other industries," said Thomas Matthews, head of Asia Pacific markets at Capital Economics, who thinks investors are betting on better productivity and profits from the new technology.

But that's a more challenging narrative at present given that the biggest hyperscalers, which still dominate weightings in benchmark indexes, are planning to spend more than $650 billion on AI infrastructure investments this year while a key component of data center construction, high-bandwidth memory prices, are the highest on record.

Both are likely to weigh on margins and cashflows, potentially blunting performance in what remains the market's most important cohort.

"Memory is a meaningful line item in capex, " said Ruben Dalfovo, investment strategist at Saxo Bank.

"If memory prices rise, capex can look like it is exploding even if the number of servers grows more slowly," he added. "That can change sentiment, because markets tend to react to capex headlines first and ask detailed questions later."

It may take the market a couple of weeks to extract itself from its current contradictions, particularly now that investor focus has shifted somewhat toward macro economic issues such as jobs and inflation and the impact of fiscal policies in Europe and Asia on the U.S. Treasury bond market.

Nvidia earnings on Feb. 25, however, could provide a solid tech-sector catalyst heading into the final month of the first quarter.

CEO Jensen Huang, as ever, struck a buoyant tone in an interview Friday with CNBC.

"To the extent that people continue to pay for the AI and the AI companies are able to generate a profit from that, they're going to keep on doubling, doubling, doubling, doubling," Huang said.

If he unveils demand numbers to support that thesis, the market's likely to get the breakout it's been waiting for.

Write to Martin Baccardax at martin.baccardax@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 10, 2026 07:42 ET (12:42 GMT)

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