-- Investors were seen sharply scaling back bullish positions on U.S. stock indexes over the past week, specifically the and the , as sentiment was battered by signs of sticky inflation and rising geopolitical tensions, Citi analysts said in a note. 

Bullish positioning on the S&P dropped by $12.3 billion, with overall net positions now remaining only mildly positive on the index, Citi said. This was also in part driven by a sharp increase in new short positions over the past week. 

The shift in sentiment comes after Wall Street indexes logged two straight weeks of steep losses, as fears of higher-for-long interest rates and rising geopolitical tensions in the Middle East battered sentiment. 

Weak risk appetite also saw investors collect profits from a stellar run-up in Wall Street through the first quarter, as technology stocks rallied. But the sector was now the worst hit with profit-taking. 

“Positioning for the S&P is now only marginally bullish while Nasdaq has turned neutral on the back of flows which were predominantly led by new shorts and continued de-risking of longs,” Citi analysts said in a note.

They also said that current positioning levels could potentially “amplify any further sell-off.” 

The S&P 500 was trading down nearly 4% over the past month, while the Nasdaq 100 was down over 5%. They were still trading positive for the year-to-date, but had culled a bulk of their gains. 

Chipmakers, such as index heavyweight NVIDIA Corporation (NASDAQ:), were the worst hit by the recent sell-off, after disappointing earnings and outlook from ASML Holding NV (AS:) and TSMC (NYSE:), which are considered to be bellwethers for the semiconductor industry. 

Still, Wall Street found some stability on Monday, recovering from sharp losses as weaker valuations in the technology sector attracted bargain buyers.

A slew of key earnings from the tech sector are due this week, with four of the “Magnificent seven” set to report first-quarter results in the coming days.

Earnings are largely expected to drive the next leg of movement for Wall Street, as investors will be gauging whether major companies can justify a stellar run-up in valuations through the first quarter.