Semiconductor stocks extended their rebound after a sharp selloff triggered widespread margin calls and forced liquidations among leveraged momentum traders. With much of that selling pressure now exhausted, buyers have returned, helping fuel a strong recovery across the sector. Whether the rally can continue depends largely on whether additional leveraged positions still need to be unwound. $SOXL $AMZN $AAPL $SKHY $SSNLF

South Korea mirrored the rebound, with SK Hynix and Samsung posting historic one-day gains after government support measures and fresh AI investment plans boosted confidence. Amazon also lifted market sentiment after reporting strong earnings and rapid AWS growth, alongside plans for massive capital expenditure that reinforced optimism around long-term AI infrastructure demand.

Apple delivered earnings above consensus but fell short of elevated market expectations, while softer guidance and ongoing supply constraints disappointed investors. Ironically, those supply constraints also reinforced demand expectations for semiconductor suppliers.

Elsewhere, Reddit declined despite beating earnings forecasts, highlighting AI’s mixed impact: licensing data to AI companies is generating revenue, but AI-powered search is reducing user engagement.

Investors are also watching elevated Treasury yields, which continue to raise concerns that the Federal Reserve may be lagging inflation risks. Friday’s trading could remain volatile as short covering, profit taking, Middle East developments, and upcoming consumer sentiment data all compete to drive market direction.

Semiconductor stocks remain under pressure, with the leveraged semiconductor ETF making fresh lows after a recent rebound failed at a key resistance level. While technical indicators suggest the sector is becoming oversold and due for a potential bounce, sentiment has weakened significantly. $SOXL

The latest selling follows a sharp 10% decline in South Korea’s KOSPI index, reinforcing the recent pattern of U.S. semiconductor stocks taking their lead from Korean markets. The catalyst is growing concern over rising competition from China after memory chipmaker CXMT’s blockbuster IPO highlighted the country’s rapid progress in semiconductor manufacturing. Investors are also reassessing China’s efforts to develop advanced lithography equipment, although commercial alternatives to ASML’s technology are still considered some distance away. $ASML $MU

Markets are also becoming more cautious about AI-related circular financing, where suppliers help finance customer purchases. Such structures can boost reported sales but delay cash generation, drawing comparisons with practices seen before the 2000 technology crash.

Attention now shifts to the Federal Reserve, with policymakers beginning a two-day meeting ahead of tomorrow’s interest-rate decision. While recent economic data could justify higher rates, political pressure continues to favor lower borrowing costs, leaving room for a surprise.

On the geopolitical front, Oman has proposed a joint management framework for the Strait of Hormuz with Iran, a development that could ease tensions and improve the outlook for global energy markets if negotiations succeed. $QQQ $NVDA

Technology stocks are rebounding, with the Nasdaq 100 bouncing from a key support level as investors aggressively buy AI-related names. The rally is being driven primarily by reports that Nvidia is backing a massive OpenAI data center project in Ohio, potentially involving more than $500B in infrastructure and up to $350B in chip financing. The announcement reinforces confidence that AI investment remains robust, although it also raises concerns about circular financing, where suppliers finance customers’ purchases, echoing practices seen during the dot-com era. $NVDA $QQQ

Market sentiment also improved after President Trump halted military operations against Iran following 13 days of conflict, easing geopolitical fears despite ongoing debate over U.S. munitions supplies. In China, memory chipmaker CXMT surged 466% on its IPO debut, highlighting continued investor enthusiasm for AI infrastructure.

The rapid rise of CXMT also raises strategic questions for U.S. chipmakers. If Apple is eventually permitted to source memory from the Chinese company, it could intensify competition for Micron and reshape the global memory market. $AAPL $MU

Meanwhile, SpaceX shares weakened despite a successful Starship test flight, as investors focused on a large upcoming share unlock that could increase volatility. Separately, durable goods orders came in below expectations, pointing to a softer manufacturing backdrop even as enthusiasm for AI continues to dominate equity markets. $SPCX

Intel’s stronger-than-expected earnings have lifted sentiment across semiconductor and technology stocks after recent weakness. The stock rallied following results that beat both consensus and market expectations, helping stabilize the broader chip sector. $INTC

The results also highlight a potential shift in the AI investment narrative. While GPUs remain essential for training large AI models and high-performance inference, the next generation of AI agents is expected to rely more heavily on CPUs for tasks such as web browsing, API interactions and database queries. This trend could benefit CPU leaders like Intel, while companies offering both CPUs and GPUs, such as AMD, may be particularly well positioned. $AMD

Investors should also watch developments in South Korea, where regulators plan to tighten margin requirements on leveraged ETFs. The move could reduce speculative activity and increase the risk of margin-driven selling in semiconductor-related names, including memory stocks that have enjoyed strong momentum in recent months. $MU $SKHY

Geopolitical risks remain elevated, with reports that President Trump is considering a major military strike against Iran. However, markets have largely shrugged off the headlines, as well as reduced tanker traffic through the Strait of Hormuz. Investors have also shown limited concern over newly announced U.S. tariffs of 10%–12.5% on imports from 60 countries, suggesting market focus remains firmly on earnings, AI spending and economic fundamentals. $EWY

Alphabet and Tesla delivered earnings that highlighted a growing divide in the AI investment cycle. Although Alphabet exceeded both consensus and market expectations, its quarterly free cash flow turned negative as capital expenditure guidance increased sharply. Tesla also posted negative free cash flow while signaling even heavier spending on AI, robotaxis and humanoid robots. $GOOG $TSLA

Ordinarily, such aggressive AI investment would be expected to boost semiconductor stocks, as chipmakers benefit directly from rising infrastructure spending. Instead, semiconductor shares weakened in early trading, suggesting investors may be reassessing the sector despite continued demand. Texas Instruments also fell after reporting earnings that beat consensus but failed to match elevated whisper expectations, while Intel’s results later today will provide another important read on semiconductor sentiment. $TXN $INTC

Geopolitical tensions are adding to market uncertainty. Houthi attacks on oil tankers in the Red Sea have opened a new front in the Middle East conflict, prompting President Trump to warn of significant military retaliation against both the Houthis and Iran. Brent crude is approaching $100 per barrel while U.S. benchmark WTI has climbed above $90, raising concerns that higher energy prices could reignite inflation.

Meanwhile, stronger-than-expected jobless claims point to a resilient labor market despite ongoing AI-driven layoffs, increasing expectations that the Federal Reserve may need to raise interest rates. The European Central Bank left rates unchanged. $SOXL

Semiconductor stocks are pausing after a strong rebound, with the leveraged semiconductor ETF retreating after reaching a key resistance level. Optimism had been building for a continued rally, but renewed geopolitical tensions are weighing on sentiment. $SOXL

The latest catalyst is the reported enforcement of a Houthi blockade in the Red Sea, with several ships turning back near the Bab el-Mandeb Strait. Combined with ongoing disruption around the Strait of Hormuz, the development raises concerns over global oil supplies and the risk of higher energy prices, creating fresh uncertainty for equity markets.

Attention now turns to a busy earnings session featuring Alphabet, Tesla and Texas Instruments. While the technology giants are likely to dominate headlines, Texas Instruments may provide a more valuable read on industrial and AI-related semiconductor demand. Investors will also watch Analog Devices as a key gauge for the broader analog chip market. $TXN $GOOG

Elsewhere, SpaceX faces heightened volatility ahead of a major share unlock on 6 August. Although many expect selling pressure, the unusually large short interest also raises the possibility of a sharp short squeeze instead of the widely anticipated decline.

In Japan, the yen briefly weakened to levels last seen in 1986 as rising oil prices increased concerns for the import-dependent economy. Expectations of faster Bank of Japan rate hikes could have wider implications for the global carry trade and AI-driven markets. $TSLA $SPCX

Semiconductor stocks are rebounding after recent weakness, with the leveraged semiconductor ETF forming a short-term bottoming pattern supported by stronger trading volume. Having already shaken out many stop-loss orders, the sector now faces a key technical test: whether it can reclaim the upper end of its current trading range. $SOXL

Optimism is being fueled by reports that mediators are proposing a 10-day ceasefire between the U.S. and Iran, easing geopolitical concerns and encouraging investors back into technology shares. Additional support came from a 3.6% overnight gain in South Korea’s KOSPI index, reinforcing the recent pattern of U.S. semiconductor stocks tracking Korean markets.

Investor enthusiasm is also building ahead of upcoming chip earnings, particularly Intel’s results later this week. Buying has been strongest in memory and storage names, including Micron, SK Hynix, Western Digital and Seagate, while networking and optical infrastructure companies have also attracted renewed interest. $MU $INTC $MRVL

Despite the improving tone, geopolitical risks remain elevated. Reports suggest President Trump is considering a broader military campaign against Iran to strengthen the U.S. negotiating position, although any escalation may be constrained by domestic political considerations.

Meanwhile, China is weighing new measures to support its equity market while simultaneously tightening restrictions on exports of advanced domestic AI technologies, highlighting the increasingly strategic nature of the global AI race. $WDC

Micron remains a key indicator for the semiconductor sector as AI models continue to drive demand for high-bandwidth memory. Following a sharp pullback, the stock is trading between key support and resistance levels, with investors watching closely for a breakout that could signal the next move for chipmakers and the broader market. $MU

China’s Moonshot AI model has unsettled Wall Street, but the long-term implications may be more balanced than initial reactions suggest. Memory suppliers stand to benefit from rising demand for high-bandwidth memory, while networking and optical infrastructure providers could also see stronger spending as AI deployments expand. GPU makers face a mixed outlook, as improved efficiency may reduce chip requirements per task, although surging demand could still support overall sales. $NVDA $MRVL

Conversely, frontier AI developers may face greater competitive pressure as advanced Chinese models emerge, while many open-source AI offerings risk losing differentiation. Geopolitical tensions also remain a key uncertainty, with the possibility of future U.S. restrictions on Chinese AI technologies reshaping the competitive landscape.

Elsewhere, reports that the U.S. Department of Defense is considering major computing contracts with SpaceX boosted interest in the company. Rising tensions in the Middle East briefly lifted oil prices before hopes of a 10-day ceasefire eased concerns. Investors will also monitor the Leading Economic Index and forthcoming changes to core PCE inflation calculations. $SPCX $GOOG