WS #10575

The dominant narrative is a severe global tech selloff driven by AI capex fatigue and semiconductor rout, now in its second day. The Philadelphia Semiconductor Index fell 7.9%, with Micron, Marvell, and ON Semiconductor leading losses. South Korea's KOSPI plunged 9.99% before bouncing 3.65% in early Wednesday trade. The Nasdaq fell 2.2%. Bitcoin dropped toward $62,000 amid broad risk-off. This is an ESCALATING theme: the AI trade is having its biggest reality check yet, with hedge funds unwinding leveraged tech positions. Cross-source corroboration is strong: Bloomberg, CoinDesk, GDELT, and multiple Asian market reports all confirm the same narrative. The selloff is spreading to crypto and commodities (gold, silver falling). Counter-signals are limited: KOSPI's partial recovery and a Barclays/Stifel S&P 500 target raise to 7,800 provide minor offsets but do not change the bearish near-term trajectory. Key developments include: (1) US Senate passes war powers resolution to limit Trump's Iran military action (50-48), a symbolic but politically significant rebuke; (2) Trump directs DOJ to investigate Big Oil for gasoline price gouging, adding regulatory risk to energy sector; (3) SoftBank's Son calls AI bubble talk 'blasphemy' and seeks stake in Japanese utility to power AI boom, signaling continued AI infrastructure spending; (4) Qualcomm in talks to provide custom chip-design services to ByteDance; (5) ByteDance seeks $20B offshore loan. The macro picture shows a strong USD, rising rate hike expectations (3 hikes priced in), and gold/silver under pressure. The AI selloff is the primary market-moving signal, with second-order effects on crypto and commodities.