U.S. Futures & World Markets

Stocks are slightly lower premarket as semiconductor stocks come under pressure after Samsung failed to live up to Wall Street's lofty earnings expectations. Adding to the weakness, news that China's DeepSeek is developing its own AI chip is giving investors another excuse to take some profits in the space.

Higher oil prices aren't helping either after another missile attack in the Strait of Hormuz. Treasury yields are also creeping higher, with the 10-year yield at 4.50% this morning. While 4.50% isn't necessarily an alarming number on its own, it was sitting at 4.37% last week — the trend higher tends to be a headwind for stocks.

With a light economic calendar this week and the usual summer slowdown in trading volumes, it's not surprising to see a bit of a listless tape. Semis and mega-cap tech stocks led the bullish charge yesterday (Nasdaq was +1.1%), and that has been the recipe to keep the tape moving in the right direction. For now, markets are looking for direction, and today feels like more of a pause as investors wait for the next catalyst to emerge.

S&P Futures vs. Fair Value: -10.00  |  10-Year Yield: 4.50%

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Charts & Data

AI "exposure" measures disagree most where the stakes are highest — the label carries less meaning than it appears. Torsten Slok, Apollo: five different measures of AI labor market exposure are all telling different stories. "What could AI do to this job?" and "What are workers actually using AI for?" are not the same question. The theoretical measures run systematically higher than the usage-based ones. Until the measure is pinned down, "AI exposure" is a largely meaningless label.

59% of S&P 500 technology stocks are now trading at least 20% below their 252-day highs. Turning Point Research via Daily Chartbook: a tale of two markets inside tech — some names crushing it, many quietly in bear market territory. The headline index conceals this dispersion.

The 63-session correlation between the Mag 7 ETF and the Semi ETF is at a record low — capex spenders punished while recipients are rewarded. Luke Kawa, Sherwood via Daily Chartbook: the AI trade has split in two. The companies buying the chips are lagging; the companies making the chips are leading. For now.

S&P 500 breadth making new highs even as the index chops — "still looks like rotation inside a bull market." Grant Hawkridge via Daily Chartbook: "If breadth starts weakening alongside Technology, that's a different story. Right now, this still looks like rotation inside a bull market." The most important chart of the week.

Semi forward profit margin at a record 50.3% — but investors are only paying 18.4x forward earnings. Ed Yardeni via Daily Chartbook: "The bubble this time might be in analysts' expectations for the forward profit margin." A disconnect between the margin story and the valuation story that needs to resolve one way or the other.

Hyperscalers are now spending more on capex than operating cash flow. Jim Reid, Deutsche Bank via Daily Chartbook: a milestone that signals the AI build-out has reached a level of commitment that makes it very hard to reverse. The question is whether the returns follow.

The S&P 493 is responsible for ~96% of price returns this year — another reason to call it the "Lag 7." Ben Carlson, A Wealth of Common Sense via Daily Chartbook: the broadening of the bull market beyond the Magnificent Seven is the defining investment story of 2026.

S&P 500 Value index just quietly made a new all-time high — Growth peaked a month ago. Callum Thomas via Daily Chartbook: a rotation signal that's showing up in the index level data, not just sector data. Value is no longer just the unloved cousin of growth.

Once EPS growth rolls over, price performance tends to lag — multiple compression already underway. Duality Research via Daily Chartbook: "That's pretty much what we're already seeing again, with the multiple compression that's been going on for a while now." The bull market is still intact, but the easy money has been made.

July seasonality favors Technology, Industrials, and Discretionary — strong earnings and guidance could push the S&P to new highs. @bluekurtic via Daily Chartbook: "Major earnings reports begin next week. Strong earnings and guidance could provide the catalyst for new highs in the S&P 500 — our base case for the month."

VIX seasonality: July is usually the calm before the storm — August and September historically much higher. @itmrandy via Daily Chartbook: investors would be wise to use the summer calm to add some cheap protection before the seasonal volatility picks up.

Global breadth has narrowed significantly — only ~50% of ACWI markets above 50-day averages, down from 85% earlier this year. Willie Delwiche, Hi Mount Research via Daily Chartbook: "Narrow global rallies can be as fragile as narrow domestic rallies." A caution flag for international exposure.

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.