With all the wild volatility and hair-pulling over the fate of bank stocks, the average person on the street probably thinks the stock market has cratered this week. But it hasn’t: The S & P 500 is up 2.6%. You can largely thank the performance of tech stocks, where the bulls have once again seized the reins. Large swaths of the S & P 500 remain underwater this week, but not tech and its tech-like cousin communication services: S & P sectors this week : Banks down 7.3% Energy down 5.7% Materials down 2.1% Industrials down 1.0% Health care up 2.5% Technology up 5.8% Communication services up 7.4% Technology and communication services together make up roughly 35% of the S & P 500, so when those two sectors move big it can pull the entire S & P index up with it. All the largest tech stocks have had big gains this week: AMD up 17% Meta Platforms up 14% NVIDIA up 11% Alphabet up 11% Microsoft up 11% Intel up 11% Amazon up 10% Apple up 5% But the tech rally is broader than the mega-caps. “Thematic tech” ETFs that focus on a small slice of the tech market have also rallied: ARK Innovation (ARKK) up 8.9% First Trust Internet (FDN) up 7.2% Semiconductors (SMH) up 5.8% Cloud Computing (WCLD) up 5.9% Social Media (SOCL) up 5.2% Robotics/Artificial Intelligence up 3.0% What’s going on? The tech bulls “are expecting a dovish rate hike” from the Federal Reserve, Alec Young, chief investment officer at Tactical Alpha, told me, meaning bulls are expecting the Fed to raise rates when the next meeting ends March 22, but that it may be the last. That makes some sense. To the extent the big risk to tech stocks is the Fed continuing to raise rates, any sign that trend might be reversing would be a positive for the sector. That is what the market has come to believe. Fed funds futures, which are futures contracts based on where the federal funds rate might be, are now pricing in the possibility the Fed may begin cutting rates sometime in the middle of this year. That is a big change from even two weeks ago, when the expectations were that the Fed would keep raising rates and maintain them at a high rate for at least the rest of the year. Still, it’s a long way from 2020, when the Fed was pumping money into the system. Despite help for the banks, the Fed is still looking to withdraw liquidity. “I think a lot of people seem to think we get lightning in a bottle for ARK-type stocks again, but I think 2020/21 is very different than now, even with a dovish hike,” Peter Tchir from Academy Securities told me.