WS #12881

The dominant narrative remains the ESCALATION of the AI capex selloff, with Asian semiconductor stocks plunging sharply overnight. South Korea's KOSPI slumped over 7% as AI spending fears hammer chip stocks, and Japan's Nikkei fell 0.65% at the open, driven by deepening AI fatigue and Nvidia financing worries. This corroborates the ongoing AI capex risk narrative and suggests further downside for US semiconductor names (NVDA, AMD, MU) at the open. Meanwhile, the US-Iran de-escalation continues to hold, with oil prices trending lower (WTI $81.55, down 1.28%) as a fourth night passes without attacks. Trump confirms talks are ongoing, but warns military action could resume. The Houthi blockade of Red Sea shipping adds a new geopolitical layer that could reignite energy supply fears. The FOMC meeting this week adds macro uncertainty, with Polymarket showing high probability of no rate change. DeepSeek has paused its $1.4B funding round at a $71-74B valuation after unverified transcripts of founder remarks spread, with the founder reportedly saying DeepSeek still relies on Nvidia chips. This is a negative signal for the AI narrative but also confirms Nvidia's continued relevance. Apple has regained the world's most valuable company title, closing at $4.948T vs Nvidia's $4.756T, as investors favor Apple's moderate AI spending approach. The FAA has warned that seats on 453 Boeing 737 MAX planes may be incorrectly installed, requiring inspections, adding to Boeing's safety woes. Japan's FinMin Katayama made multiple statements on the BOJ accord, GPIF portfolio, and forex intervention readiness, but these are largely noise. RBA Governor Bullock's comments on the economy cooling and rates potentially needing to rise further are notable for AUD but not directly US market-moving.