Celestino Brunetti @celesh: "Recap & Radar: The AI..."

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Recap & Radar: The AI Trade Cracks and War Returns to Hormuz Dear copiers, investors and followers, In this Recap & Radar I'll briefly cover what moved markets recently and what could matter in the days ahead, with a focus on what is potentially relevant for my portfolio. What broke the AI trade's week Semiconductors led a sharp selloff. The Philadelphia Semiconductor Index entered a bear market on Friday, more than 20% below its June peak and its worst week in over a year, despite a late bounce. The $NSDQ100 and $SPX500 fell on the week, and the Dow had its worst week since March. The trigger was not macro. June inflation came in soft, and the odds of a September Fed hike dropped to about half, from around 70% a week earlier. The pressure came from inside the trade: fear that AI capital spending is running ahead of returns, and a powerful new Chinese open model from Moonshot that revived the cheaper AI worry, echoing the DeepSeek shock. Money rotated out of chips into financials, industrials and energy. War returns to the Strait of Hormuz The June memorandum between the United States and Iran has effectively collapsed. Over the weekend Iran said the ceasefire was over and that it intercepted four vessels in the strait, while both sides exchanged fresh strikes and the US kept its naval blockade in place. Oil posted its biggest weekly gain in months, spiking early Monday before easing as mediators floated new proposals. This keeps inflation and rates in the conversation and is the main swing factor this week. How my portfolio behaved The chip selloff hurt my portfolio directly. My index hedges did their job and absorbed part of the decline. The Middle East escalation was offset by $OIL, which rallied hard last week as the conflict flares and Hormuz traffic is disrupted. The dollar is broadly flat, holding last week's late rebound. $GOLD remains one of the big losers of this period, still stuck near the 4,000 dollar area. It is falling while a war escalates, which is counterintuitive. I will explain my view on this soon. The days ahead As markets open this week, chips are bouncing and oil has given back part of its spike, a reminder of how quickly this tape turns. From here, earnings and Hormuz set the direction. Alphabet $GOOGL (Alphabet Inc Class A) and Tesla $TSLA (Tesla Motors, Inc.) report after Wednesday's close, Intel $INTC (Intel) on Thursday. The market wants proof that hyperscaler AI spending is justified, and these results will set the tone for the whole AI complex. On the macro side, I am watching this week's US oil inventory report, which will show how the renewed conflict is feeding through to supply. Hormuz stays the wild card, since any further escalation feeds oil and revives the inflation worry. Ad maiora This post is for informational and educational purposes only and does not constitute financial advice or a solicitation. Every decision remains the sole responsibility of each investor.

Not investment advice. The author may have financial interests in the mentioned instruments.