Weekly Review

The dominant theme in U.S. equity markets last week was the sharp repricing of hyperscalers, prompted by investors showing little tolerance for rising capital expenditures tied to AI infrastructure.

A sharp selloff in global memory chip stocks accelerated through the week, sparking concerns over the sustainability of the artificial intelligence investment cycle, while renewed hostilities in the Middle East and shifting Federal Reserve expectations drove broad sector rotation across global equity markets.

Concerns over the durability of the artificial intelligence rally and renewed geopolitical tensions in the Middle East dominated global equity markets this week. Selloffs in memory chip companies early in the week were tied to Samsung’s preliminary earnings report, in spite of the fact that the company forecasted a nearly 20-fold year-over-year increase in profits.

A lackluster showing for the labor market took center stage last week—June’s 57k new jobs number was nearly 50% below expectations, while the previous two months’ figures were revised down by a combined 74k.

Last week’s overarching story in equity markets was the artificial intelligence trade—after an extraordinary run, investors decided it had become overextended. Heavy declines in Samsung Electronics and SK Hynix fueled an over 10% decline in South Korea’s KOSPI index on Tuesday, a market that is still up 125% YTD.

As the week began, investors extended the previous week’s relief rally, fueled by news of a deal to end the U.S. Iranian conflict and the potential that the Strait of Hormuz may reopen soon. Lower energy prices supported the Industrials and Materials sectors, and Technology benefited from the overall improvement in risk sentiment.

The week before last ended with a sharp selloff in the wake of a stronger-than-expected U.S. employment report, leading the dollar and Treasury yields to surge.

U.S. equities began the week with a continuation of the relentless semiconductor led rally that propelled all the major averages into new highs until a dramatic mid-week sector rotation occurred.

U.S. equities extended their rally for a ninth consecutive week, with the S&P 500 climbing as easing oil prices, resilient earnings, and AI-linked momentum overcame inflation concerns. Alongside the S&P, the Nasdaq-100, Nasdaq Composite, and DJIA all closed at record highs on Friday, with only the Russell 2000 pulling back a touch from Thursday’s record close.

After dipping early in the week, pressured by rising yields and the imminent possibility of renewed military conflict with Iran, US equity indices reversed course by midweek and ended up either just beneath (S&P 500), at (Nasdaq 100), or above all time highs (DJIA.) Nvidia, the bluest of the blue-chip chipmakers, announced earnings and revenues that once again beat street estimates, yet the stock and broader market barely responded.

Major US equity indices pushed to fresh highs early in the week, as AI and semiconductor strength helped support the S&P500 and Nasdaq, before rising yields and renewed inflation concerns pressured growth stocks
into the close. Market leadership remained narrow and tech-driven, with investors continuing to reward AI- related earnings momentum, though high-multiple equities remain sensitive to any backup to rates.

U.S. equity indexes extended their April rally, rising modestly last week as the S&P500 and Nasdaq reached fresh record highs, led by Big Tech after stellar earnings boosted share prices. Ten of eleven S&P500 sectors finished higher on the week – materials were the sole loser.