The S&P 500 declined 1% and the Nasdaq Composite shed 1.4%, extending a brutal week for semiconductor stocks amid concerns about AI spending sustainability and the release of a powerful new Chinese AI model. Netflix plunged double-digits after quarterly earnings slightly topped expectations but revenue missed consensus and forward guidance disappointed. Oil surged 4.05% to $82.15 as Middle East escalation intensified.
→ Hyperscaler earnings starting next week with Alphabet, which will test whether AI capex fears are overdone.
→ VIX surge of 20% this week signals complacency is evaporating fast; watch for a close above 20 to shift from caution to active hedging territory.
→ Oil prices—key transmission mechanism for Middle East risk to equities—have risen more than 10% this week after the US reinstated a naval blockade near the Strait of Hormuz.