U.S. Futures & World Markets

US stocks are under pressure as we head into this summer Friday, with semiconductor stocks leading the way lower (SOX down 4% premarket). Semis have now been in a steady drawdown for roughly a month.

JPMorgan's desk summed up the tech backdrop well:

The overall tech narrative has been deteriorating for a while, and the list of things worrying people will sound familiar: the absence of free cash flow for hyperscalers/neoclouds, costs that seem to scale higher with revenue, the reliance on capital markets to fund capex (as spending swamps operating cash flow), the huge pipeline of debt/equity supply washing over markets, the increasingly poor financial prospects for frontier labs (training costs remain extremely elevated, competition is fierce, open-source models are capturing a huge amount of share), and questions about data center overcapacity.

JPMorgan

I know that's a lot to think about as we head into the weekend, but that is what the market is grappling with after the meteoric rise in tech and semi names. Expectations became incredibly high, and investors are asking tougher questions. It doesn't mean the AI trade is dead, but it has definitely paused.

The last headline below caught my eye — another reminder that we live in incredible times. Advances in healthcare and biotech have the potential to dramatically extend lifespans. As an investment advisor, I think about this constantly when building financial plans. GLP-1s, next-gen statins, and AI-driven breakthroughs in biotech could fundamentally change retirement planning. Living longer is a wonderful thing, but it also means your money may need to last longer too.

S&P Futures vs. Fair Value: -69.00  |  10-Year Yield: 4.54%

CORE Headlines

Charts & Data

Drawdowns from their highs: Micron -25%, Microsoft -27%, Sandisk -31%, SpaceX -33%, Netflix -45%, Oracle -60%. And yet the S&P 500 is basically at all-time highs. Ben Carlson: the divergence between mega-cap drawdowns and the headline index is the defining market dynamic of summer 2026.

The number of S&P 500 stocks above their 200-day MA continues to trend higher and is close to 70% — the highest level since February. Ryan Detrick: "This is not bearish action and suggests the surprise summer rally has legs." Breadth is improving even as the AI names struggle.

A record $903.8B in US equities bought by foreign investors over the past year — but they have a pattern of peaking at exactly the wrong time. Yardeni Research: "That would be bullish news, except they have a pattern of peaking at exactly the wrong time. Are we near a top?" A cautionary historical note.

Nasdaq 100 is on track for its worst July in 22 years. Barchart: a sobering data point that reinforces the rotation narrative. The Nasdaq hasn't had a month this bad since the dot-com unwind began in earnest.

QQQ is more than 5% from its all-time high but SPX is less than 1% from its all-time high — with VIX under 20 and VXN under 30. @oddstats via Daily Chartbook: a historically unusual divergence. The S&P is holding up while Nasdaq decouples. History gives few precedents.

The ratio of average vol of the Top 20 S&P stocks vs. index-wide single stock vol has seen a sharp uptick towards multi-decade highs — these stocks are now more volatile than the average S&P stock. BofA via Daily Chartbook: an atypical dynamic that reflects the concentration risk embedded in the current market structure.

Q2 GDPNow improved to 1.7% from 1.3% on July 8. Augur Infinity via Daily Chartbook: a meaningful upward revision that suggests the economy held up better than feared through the oil shock and geopolitical volatility.

The US is doing a good job with its blockade — Iran's currency falling to new lows. Robin Brooks: "It's disabling empty Iranian oil tankers, preventing Iran from using them as floating storage. It's taking out oil infrastructure. This is the way..." A sign the economic pressure campaign is working.

Traditional safe haven trades have too often failed to hedge during this decade's market shocks — diversification has to be multidimensional and adaptive. Deutsche Bank via Daily Chartbook: the old playbook of bonds and gold as ballast isn't working the way it used to.

Active managers increased equity exposure over the past week — NAAIM Exposure Index up to 95 from 83. Daily Chartbook: professional money managers are still adding risk even as retail sentiment wobbles. A constructive signal.

Bull/Bear Ratio rose to 3.12 — well above its historical average, suggesting investor optimism may be approaching excessively bullish territory. Yardeni Research via Daily Chartbook: the contrarian case for caution is building even as the fundamental picture remains supportive.

Industrials positioning fell to the 3rd percentile since 2009 — the least since 2019. Deutsche Bank via Daily Chartbook: the most hated major sector by positioning. When the AI rotation eventually broadens, industrials could be a significant beneficiary.

VIX is tracking its seasonal path closely — smart bears point to a VIX spike ahead, while dumb bulls who do nothing but win and make money say the S&P has done just fine during the same stretch. @bluekurtic via Daily Chartbook: the seasonal VIX pattern argues for elevated volatility in August and September.

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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.