WS #9114
The dominant signal in this window is a severe tech selloff, with the Nasdaq Composite posting its biggest point drop on record (-4.2%) and the S&P 500 losing $1.8 trillion in market value. The selloff was triggered by a stronger-than-expected US jobs report that pushed Treasury yields higher, diminishing hopes for near-term rate cuts, and a Broadcom AI guidance miss that sparked a rout in semiconductor stocks (SOXX -10.4%). ARM (-12.8%), Intel (-11.3%), and AMD (-10.9%) led the decline. The selloff is compounded by a wave of new stock offerings, including the highly anticipated SpaceX IPO, which is absorbing liquidity. Additionally, Iran launched drones toward the Strait of Hormuz, which were intercepted by US forces, adding geopolitical risk and supporting oil prices. Bitcoin dropped 2.83% to $61,487, and other cryptocurrencies saw steeper declines. The situation is ESCALATING for tech and risk assets, while energy may benefit from both the tech rotation and geopolitical tensions. A counter-signal: the strong jobs report lowers recession risk, which could provide a floor for cyclicals.
Key developments
- Nasdaq Composite posts record point drop, S&P 500 loses $1.8 trillion in value
- Broadcom AI guidance miss triggers semiconductor rout: ARM -12.8%, INTC -11.3%, AMD -10.9%
- Iran launches drones toward Strait of Hormuz, US forces intercept
- Strong US jobs report pushes Treasury yields higher, dims rate cut hopes
- Meta considers raising billions in share sale to fund AI development