| U.S. stocks finished lower led by technology/semiconductors again, but most of the damage was done in the overnight session when Nasdaq futures tumbled as much as -2.5% before rebounding and paring losses. Still, the Nasdaq 100 (QQQ) was down -4.15% on the week, the Tech sector (XLK) was down -5.5%, and the semiconductor index (SOX) was down -9.97% for the week (and now down -18% for the month) as investors have pulled back on the reigns in the AI/data center/semi/power space this month. Winners on the week were Energy (XLE +4.7%), REITs (XLRE +2.2%), and Consumer Staples (XLP +1.27%). Semis and Memory stocks have fallen to multi-week lows below their 50-day MAs as capital has been shifting toward strength in Financial (XLF), Retail (XRT), and Healthcare (XLV). While the SPX consolidates within 1% of record highs, softening A/D lines and waning breadth and trend indicators have weighed on sentiment. Attention turns to corporate earnings with a busy week on deck that includes GOOGL, TSLA, INTC, MMM, TXN, AXP, IBM, NOW and VZ. Although economic data releases might take a back seat, the ECB meeting anchors the weekly central bank agenda alongside several emerging market decisions with no chance expected. For the week, S&P 500 ends down -1.55%, Nasdaq down -2.9%, Dow down -0.93%. Renewed pressure in semis (SOX) came this week as investors questioned whether elevated AI-related valuations remain justified. Competition fears rose overnight, driven by Chinese startup Moonshot’s Kimi K3 Ai model rivaling OpenAI and Anthropic. Investors fear the breakthrough echoes of the DeepSeek shock, questioning the justification for massive Ai capital spending. A disappointing market reaction to TSM‘s results the day prior and higher capex guidance fueled concerns over the eventual returns on the sector’s heavy investment cycle. Weakness was particularly acute across Asia, where Taiwan, Japan and Hong Kong all posted sizeable declines given their heavy exposure to chipmakers/AI supply chains. |