WS #16531

The dominant market narrative has shifted from geopolitical risk to a severe technology sector correction, driven by Alphabet's 13% plunge on an earnings miss and alarming AI capex guidance. This event has triggered a broad-based selloff across the semiconductor supply chain, with Broadcom, Micron, and Nvidia all posting losses as investors reassess the sustainability of massive cloud infrastructure spending. Concurrently, ServiceNow collapsed 25% on a contract outlook miss, further compounding the tech weakness and signaling potential demand destruction in enterprise software. In the macro and commodities space, oil prices have stabilized near $110 following the earlier escalation of tensions in the Strait of Hormuz, with Brent crude retreating 4.8% as the immediate supply shock fears eased. The Federal Reserve held rates steady, maintaining a cautious stance despite rising inflation, while the ECB also paused. Meanwhile, Bitcoin surged to $81,500, decoupling from traditional equity weakness as strong US GDP data and institutional adoption via ICE's new perpetual futures product drove demand. Geopolitical instability remains a background risk, with reports of Chinese espionage targeting Nvidia executives and significant political turbulence in Brazil and the UK, but these have not yet displaced the primary focus on earnings-driven equity repricing. The market is currently digesting a massive deleveraging of tech valuations, with a large institutional dark pool order in Alphabet suggesting potential stabilization or accumulation at lower levels.