WS #16327

Markets are pricing in a convergence of geopolitical escalation and structural tech sector stress. The S&P 500 opened down 68 points as risk-off sentiment dominated, driven by a Houthi claim of strikes on Saudi oil facilities and a Trump suspension of new Russia sanctions. This escalation narrative is compounded by a sharp selloff in mega-cap tech, where Meta dropped over 6% and Amazon fell 3%, despite Meta beating earnings, as investors react to the $25 billion antitrust fine and rising credit risk on AI capex. The semiconductor complex remains under pressure, with Lam Research weakness spreading and CoreWeave facing financing headwinds, signaling a potential cooling in AI infrastructure demand. In a notable divergence from the broader tech weakness, SpaceX surged 8% on 161% revenue growth and merger speculation with Tesla, lifting TSLA 3%. However, Tesla's own fundamentals are under scrutiny, with analysts highlighting a revenue miss and contracting automotive margins. Meanwhile, the labor market showed a surprising 57-year low in jobless claims, contradicting recession fears but potentially complicating the Fed's path. Corporate action is also active, with Getty Images filing for bankruptcy amid AI competition and Shell/Exxon divesting their UK chemicals unit.