WS #12289

The dominant market narrative is a severe tech selloff driven by China's Moonshot AI unveiling the Kimi K3 model, a 2.8 trillion parameter open-weight AI that rivals frontier US models at a fraction of the cost. This has reignited fears of US AI competitiveness and triggered a broad tech rout, with Nvidia and other semiconductor stocks plunging. The Nasdaq is down over 200 points, and the selloff is deepening. However, several counter-signals and cross-currents are emerging: Meta is reportedly in talks for a $10 billion compute deal with Anthropic, which could support AI infrastructure demand; the University of Michigan consumer sentiment surged to 54.9 (well above forecasts), and housing starts beat expectations, suggesting economic resilience. Meanwhile, US-Iran tensions are escalating, with reports of additional US refueling planes being sent to Israel ahead of a potential massive offensive, and crude oil surging 4% to $81. This geopolitical risk is boosting energy stocks but adding to market uncertainty. The tech selloff narrative is ESCALATING, while the macro data provides a partial offset. Key MAG7 tickers show divergence: Meta is paring losses on the Anthropic deal, while Nvidia and other chip stocks remain under heavy pressure.