Last week, U.S. stocks surged. Many people asked: Could it be that AI trading has really come roaring back?
Actually, it’s not that simple. If you look closely at the market, you’ll see that what was truly being priced last week was both easing pressure from oil prices and interest rates—at the same time.
A temporary easing in the Middle East situation drove oil prices sharply lower. Meanwhile, weaker nonfarm payrolls made the Fed’s urgency to keep hiking fall dramatically. Add to that the fact that more than 80% of companies’ earnings are still providing support, and the market didn’t shift toward pricing in a recession. Instead, it made perfect sense that investors began trading interest-rate easing.
The yield on the 10-year U.S. Treasury fell back to around 4.65%, effectively loosening the grip on overvalued growth tech stocks that had been suppressed for so long. The Nasdaq jumped 5.19% in a single week, and the semiconductor index even soared by nearly 9%.
But don’t rush into blindly bullish. This rebound has two very critical details ☝️
▶️ Gold surged more than 7%, while oil fell—and gold was the one skyrocketing.
This suggests that in the second half of last week, gold’s rise wasn’t fundamentally about geopolitical hedging. It was amplified by favorable moves in Treasury yields and the U.S. dollar easing.
▶️ Tech stocks are becoming extremely selective; the market no longer buys tech just because it’s tech.
Even storage sectors that beat earnings but didn’t provide aggressive guidance still got punished. Capital is only willing to embrace software companies that can truly turn AI into revenue—plus “real-economy” leaders extending into areas like power grids and data center infrastructure.
✍️ Where do we go from here? This week’s CPI data will be the only real test ☝️
▶️ Inflation continues to cool:
The interest-rate environment keeps improving, and the tech-stock rebound can likely continue.
▶️ Inflation re-accelerates:
Rate-hike expectations for September get reignited. The most overvalued tech assets that surged the hardest last week will likely be the first to slam back into the “interest-rate wall.”
✍️ Last week was a phase of relief for valuation pressure—not the start of blind optimism. Watching Treasury yields is the key rhythm going forward.
Not investment advice—DYOR
Actually, it’s not that simple. If you look closely at the market, you’ll see that what was truly being priced last week was both easing pressure from oil prices and interest rates—at the same time.
A temporary easing in the Middle East situation drove oil prices sharply lower. Meanwhile, weaker nonfarm payrolls made the Fed’s urgency to keep hiking fall dramatically. Add to that the fact that more than 80% of companies’ earnings are still providing support, and the market didn’t shift toward pricing in a recession. Instead, it made perfect sense that investors began trading interest-rate easing.
The yield on the 10-year U.S. Treasury fell back to around 4.65%, effectively loosening the grip on overvalued growth tech stocks that had been suppressed for so long. The Nasdaq jumped 5.19% in a single week, and the semiconductor index even soared by nearly 9%.
But don’t rush into blindly bullish. This rebound has two very critical details ☝️
▶️ Gold surged more than 7%, while oil fell—and gold was the one skyrocketing.
This suggests that in the second half of last week, gold’s rise wasn’t fundamentally about geopolitical hedging. It was amplified by favorable moves in Treasury yields and the U.S. dollar easing.
▶️ Tech stocks are becoming extremely selective; the market no longer buys tech just because it’s tech.
Even storage sectors that beat earnings but didn’t provide aggressive guidance still got punished. Capital is only willing to embrace software companies that can truly turn AI into revenue—plus “real-economy” leaders extending into areas like power grids and data center infrastructure.
✍️ Where do we go from here? This week’s CPI data will be the only real test ☝️
▶️ Inflation continues to cool:
The interest-rate environment keeps improving, and the tech-stock rebound can likely continue.
▶️ Inflation re-accelerates:
Rate-hike expectations for September get reignited. The most overvalued tech assets that surged the hardest last week will likely be the first to slam back into the “interest-rate wall.”
✍️ Last week was a phase of relief for valuation pressure—not the start of blind optimism. Watching Treasury yields is the key rhythm going forward.
Not investment advice—DYOR