AI Prompts for Spotting Market Rotation Trends During Increased Volatility

Welcome back to AI in Investment Research & Finance, your go-to source for mastering powerful artificial intelligence (AI) prompts and elevating your investing game!

When US Federal Reserve Chair Jerome Powell speaks, markets listen, and his recent comments on AI were particularly striking.

At the Economic Club of Chicago, Powell described AI not merely as another tool, but as "closer to a better version of a person." He further called AI one of the most powerful forces likely to reshape the global economy over the next two decades. They are remarkable words from someone known for his measured tone.

For investors and analysts alike, this underscores a growing reality: AI is no longer optional. It’s becoming a core part of financial research and market strategy.

With markets rattled by a heavy earnings calendar and renewed tariff threats from President Donald Trump, spotting early shifts has never been more critical. In uncertain times, structured AI prompting offers a major advantage. It helps detect sector rotations, where investor money moves between industries like tech, energy or consumer staples based on shifting economic conditions before they fully unfold.

In this edition, we cover:
• Structured AI prompts for identifying early sector rotation trends
• Follow-up questions to refine your strategic outlook
• A defensive ETF spotlight on SPLV, designed for turbulent markets
• Techniques for layering AI prompts to sharpen investment research

Rather than chasing headlines, structured AI prompting helps you detect where capital is moving, early enough to act with conviction.

Here are two core prompts, along with a smart follow-up question to deepen your insight:

🔹 Prompt 1: Detect Sector Strength Early

"As an Investment Research Analyst, list the top three sectors that have been gaining relative strength compared to the S&P 500 over the past two weeks. Focus on sectors with positive returns during the current period of elevated volatility. Data sources may include S&P Global, FactSet and sector ETFs (such as XLF, XLV and XLE)."

Purpose:
Quickly spot where investor appetite is shifting, which is a leading indicator before major market moves.

🔹 Prompt 2: Monitor Capital Flows

" As an Investment Research Analyst, identify the asset classes in the US (e.g., equities, bonds and commodities) experiencing notable inflows or outflows in the past month. Emphasize any shifts triggered by trade tensions and the corporate earnings season. Refer to data from sources including Lipper Fund Flows, EPFR Global or ETF.com."

Purpose:
Reveal broader macro positioning, whether money is seeking safety, yield or growth.

🔹 Follow-up Question to Sharpen the Analysis:

"Based on the sector and asset class trends identified, what are the two or three  most likely next rotation targets if volatility persists over the next month? Prioritize sectors with historical resilience during past trade wars or earnings disappointments."

Why This Matters:
Instead of just seeing what happened, this approach helps you anticipate what could happen next. It turns data into a forward-looking strategy.

ETF Spotlight: SPLV, a Defensive Play for Volatile Markets

In times of heightened volatility, many investors seek ways to stay exposed to equities while reducing downside risk. One popular tool is the Invesco S&P 500® Low Volatility ETF (SPLV).

Quick Overview (as of April 30, 2025):

• Current Price: $72.42

• 52-Week Range: $63.38 – $75.43

• Dividend Yield: 1.74%

• Expense Ratio: 0.25% per year

The Invesco S&P 500® Low Volatility ETF offers exposure to the 100 least volatile stocks in the S&P 500, based on 12-month historical volatility. Stocks with the lowest realized volatility receive the highest weights.

SPLV tracks the S&P 500® Low Volatility Index, which is rebalanced quarterly. The fund was launched in May 2011.

The portfolio is heavily weighted toward large- and mid-cap blend and value stocks, with minimal exposure to growth and small-cap segments.

In terms of sector allocation, financials make up the largest portion at 20.05%, followed by utilities (17.6%), industrials (16.7%), consumer staples (13.5%) and health care (7.8%).

The top 10 holdings account for nearly 13% of total net assets, which stand at $7.60 billion. Leading names in the roster include Coca-Cola (KO), Berkshire Hathaway (BRK/B), Republic Services (RSG), Atmos Energy (ATO) and Marsh & McLennan Companies (MMC).

Performance-wise, SPLV has returned about 12.8% over the past year and 3.5% in 2025. With a forward P/E of around 21.1x and P/B of 3.6x, SPLV reflects investors’ willingness to pay up for stability and steady performance in a shaky market.

Why SPLV Matters Now:

• April’s tariff threats and earnings uncertainty have reignited defensive rotations.

• SPLV historically outperforms during market pullbacks while lagging slightly during sharp rallies.

• This ETF offers a way to stay invested without fully retreating to cash or bonds.

Sample AI Prompt for Further Exploration:

"As a Portfolio Strategist, analyze the recent three-month and one-year performance of SPLV versus the S&P 500 index. Break down contributions by sector exposure, and assess SPLV’s risk-adjusted returns using metrics like standard deviation, Sharpe ratio and maximum drawdown. Cite data from Invesco’s official SPLV fact sheet, Morningstar and S&P Dow Jones Indices."

Purpose:
To understand not just raw returns, but how SPLV manages volatility and downside risk relative to the broader market.

🔹 Follow-up Question:

"Considering SPLV’s historical performance during past volatility spikes (e.g., early 2020 or late 2018), how might the ETF behave if current market tensions surrounding proposed tariffs escalate? What are the key risks associated with relying solely on low-volatility strategies?"

📈 Final Thoughts

Mastering AI prompting is no longer just an advantage, but rather it's becoming a core skill in modern investment research.

By defining clear roles, referencing trusted data sources and layering smart follow-up questions, you can transform AI from a simple search tool into a strategic research assistant. The goal isn’t just faster answers, but rather better foresight.

(To ensure our next newsletter lands in your Inbox, please add our email address  [email protected] to your contacts)

Stay tuned for next week’s edition, where we’ll explore new AI prompts for deeper sector analysis.

📊 Upcoming Key Earnings (April 30 – May 6)

Markets are heading into a critical earnings stretch. Here’s the day-by-day breakdown of major reports to watch:

• April 30 (Wednesday):

  • Meta Platforms (META): Q1 2025 Earnings Release

  • Microsoft (MSFT): Q3 2025 Earnings Release

• May 1 (Thursday):

  • Amazon (AMZN): Q1 2025 Earnings Release

  • Apple (AAPL): Q2 2025 Earnings Release

• May 2 (Friday):

  • Berkshire Hathaway (BRK-A/BRK-B): Q1 2025 Earnings Release

  • Exxon Mobil Corp (XOM): Q1 2025 Earnings Release

• May 5 (Monday):

  • Microchip Technology (MCHP/MCHPP): Q4 2025 Earnings Release

  • Palantir Technologies (PLTR): Q1 2025 Earnings Release

• May 6 (Tuesday):

  • Advanced Micro Devices (AMD): Q1 2025 Earnings Release

🗓️ What’s on the Radar This Week
A quick look at the macro data and decisions that could shape sentiment:

• April 30 (Wednesday): United States GDP (Q1, advance estimate)

• April 30 (Wednesday): United States Core PCE Price Index (March)

• May 1 (Thursday): Japan BoJ Interest Rate Decision

• May 1 (Thursday): United States ISM Manufacturing PMI (April)

• May 2 (Friday): Eurozone Inflation (April, flash estimate)

📈 AI in Markets: Key Trends This Week

🤖 Slack Champions 'Agentic Productivity' with AI Agents:
Slack’s latest report highlights how AI agents are reshaping workflows, with users 72% more likely to feel "very productive." Workers without agents reportedly spend nearly 40% more time on administrative tasks. We are seeing AI’s growing role in boosting corporate efficiency.

🧠 Anthropic Sparks Debate with AI Consciousness Study:
Anthropic researchers released a landmark paper exploring the measurement of AI "consciousness" levels. While still theoretical, the work has fueled discussions about future AI safety, regulation, and investment risks as AI capabilities scale.

🚀 AI Career Moves: Exciting AI Jobs This Week

Looking for your next opportunity in AI? Explore these standout roles across industries and locations:

• 🇺🇸 Generative AI Associate Analyst – Innodata Inc.
  Annotate and refine training datasets to align AI models with human values and boost model fluency (part-time, remote, hourly).
  📍 United States (Remote)

• Other positions are also listed
  View Job Posting

• 🇬🇧 GenAI Expert, Customer Engagement – Moody’s
  Drive Generative AI strategies enhancing client interactions and business outcomes in financial services (permanent/full-time).
  📍 London, UK
  View Job Posting

• 🇬🇧 AI Product Manager – Board Intelligence
  Lead AI-powered product development to transform board governance and decision-making processes (permanent/full-time).
  📍 London, UK
  View Job Posting 

• 🇪🇸 AI & GenAI Product Owner – Roche
  Own the vision and execution of AI and Generative AI products across global group processes in healthcare (permanent/full-time).
  📍 Madrid, Spain
  View Job Posting

• 🇭🇷 AI Literacy Programme Lead – Transcom
  Develop and lead AI education initiatives, ensuring effective AI adoption across global teams (permanent/full-time).
  📍 Croatia (Remote/Flexible)
  View Job Posting