WS #12279

The dominant theme in this window is a sharp selloff in US tech and semiconductor stocks, with the Philadelphia Semiconductor Index on track for its worst week in over 15 months. The selloff is driven by growing concerns over AI spending sustainability, with UBS estimating hyperscaler capex growth will decelerate sharply from 76% this year to 25% next year and 6% in 2028. This has triggered a rotation out of chip stocks and into hyperscalers themselves. Netflix plunged ~11% after weak guidance, now down 50% from its peak, adding to tech weakness. Meanwhile, Apple has overtaken Nvidia as the world's most valuable company ($4.88T vs $4.84T) as investors rotate from AI infrastructure plays to companies better positioned to monetize AI through services and hardware upgrades. Geopolitical risks are escalating: US-Iran strikes have resumed after the truce collapsed, with crude flows through the Strait of Hormuz falling to two-month lows and Brent crude climbing ~2% to near $86/barrel. Iran has attacked a Kuwaiti desalination plant, expanding infrastructure targeting. WTI crude posted its strongest weekly gain in months, rallying over 11%. The University of Michigan Consumer Sentiment preliminary reading for July came in at 54.4, beating the 51.3 consensus and the prior 49.5, while one-year inflation expectations eased to 4.2% from 4.6%. Dollar hedging costs sank to their lowest level this year. The prevailing narrative is a tech rout (ESCALATING) and oil supply concerns (ESCALATING).