There'll be a little bit more volatility in tech and communication services, largely speaking... so there'll be some choppiness there. The interviewee directly forecasts increased volatility and 'choppiness' for the tech sector (a core component of NDX) in the near term, citing questions about sustaining high growth rates in the AI capital investment build-out and execution challenges.

We feel pretty good about the small cap space. In fact, we have overweight in large cap mid cap and small cap. The interviewee is explicitly overweight small caps (RUT proxy), citing their recent all-time highs, fiscal relief (100% expensing), and the benefit from lower rates. This constitutes a cautious positive outlook.

The interviewee states that 'a little bit lower rates... ultimately helps small caps as well.' This implies an expectation that rates will be lower, which is supportive for small caps. The context of the Fed's recent 'risk-on' liquidity move and the mention of the program continuing supports a cautious downward bias for yields over the medium term.