With the yield curve flattening and the market dipping, there have been murmurings on Wall Street of an impending recession. Leading analysts say the movement is more likely a response to the Republican tax bill, but warn investors to be wary of tech.
Uncertainty about how and when the tax reform bill will be implemented has pushed the market into a bit of a slide. Each new detail, emerging from the House and Senate, seems to damage investor confidence.
"Not a lot of reason to buy the market at the highs, unless there is a reason. People want to see something. Every time we see anything on this tax bill, it's watered down," Steve Grasso said on CNBC's "Closing Bell."
With earnings season at an end and no end in sight for tax bill revisions, investors don't have much reason to buy.
Joe Duran of United Capital emphasized that the market's recent volatility has only been jarring because its been on a relatively stable climb for so long.
"It's been 370 days since we've had a three percent decline, it should happen three times a year," he said.
One stock that has been on the up and up this year is tech. Tech now makes up 24 percent of the S&P 500, which for UBS's Michael Zinn is a red flag that reminds him a little too much of 1999.
"We like tech, but we just think that people should be aware it's a very, very large part of the index at this point, and it's prudent probably to temper those bets," he said.
With big tech players occupying increased market share, a wobbly few days in stocks and a flattened bond yield curve, it would be only too easy to anticipate a recession. But Chief Economist and UCX Co-founder Jack Bouroudjian said it all boils down to the tax bill.
"That flattening of the yield curve is really what was scaring people. I don't think its any coincidence that we really saw everything really change and momentum, not only of stocks and bonds change, when we saw the announcement come out of the Senate," he said.
Since the market hadn't factored in postponing the 20 percent tax cuts for another year, the uncertainty is driving volatility, Bouroudjian said.
Zinn went so far as to say investors should prepare for a flatter yield curve, due to the Fed's more cautious approach to rate hikes.
"The Fed has long term rate expectation. We may get a curve lower than 50 blips, but it doesn't necessarily mean a recession is impending," he said.